High US health care spending explained by its high material standard of living • Hacker News Board

Re: High US health care spending explained by its high material standard of living

#51

Post by arkis22 » Mon, Mar 13, 2017, 1:55 AM UTC

yummyfajitas wrote: post #47

arkis22 wrote: post #40

This strikes me as circular logic. "The reason healthcare is expensive is because the US is expensive." I have no problem with the idea of healthcare expenditures increasing proportionally to GDP because it's a luxury good. This is logical. I'll pay more to protect my life than widgets. But I don't see the connection between this and the thesis: >Now, to be clear, my position is not that we ought to be spending as mu…

No, what he's saying is the reason (health care consumption / GDP per capita) is abnormally high in the US is the probably same as the reason that (all consumption / gdp per capita) is abnormally high in the US. That's not circular. It's merely pointing to an underlying cause that is probably not specific to the health care system.

If it's not specific to the healthcare system, price increases should mirror inflation.

The underlying cause being high material standard of living? Because that is why it's circular logic to me.

I still have a problem with using the end economic result data.

It _automatically_ assumes that price increases are called for based on the market.

If all firms in an industry can raise prices at the micro level, then no firm stands out at the macro level, which means macro analysis is kind of useless.

An analysis of healthcare companies COGS and profit margins would be more illuminating.

Re: High US health care spending explained by its high material standard of living

#52

Post by rbehrends » Mon, Mar 13, 2017, 2:01 AM UTC

malandrew wrote: post #30

arcticbull wrote: post #4

Strange, this neglects that portion of health care spend that is accounted for by profits, by marketing expenses and administrative/billing bloat that ensues. It also neglects that for its massively higher spend 10% of Americans aren't covered and therefore don't receive preventative care yielding massively higher final costs, and it doesn't take into account the WHO ranks the US system as 31st in the world dramatica…

What amazes me is how few people value the value of profits in our system. The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England. Profits provides the impetus for many of the medical advances invented here in the US, and many of these advances find their way to other countries. Because of profits, the US is essenti…

> The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England.

These seem to be academic publications and according to this Quora post [1], it's primarily driven by American universities and research institutes. It is not entirely clear to me how profits within the US would be a major factor here: I would have thought that NIH spending is more important in this context. While it's sort of true that NIH spending is more relevant for the R in medical R&D and industry spending for the D in R&D, the Forbes article seems to be only about peer-reviewed published research.

[1] https://www.quora.com/What-countries-have-lead-the-world-in-...

Re: High US health care spending explained by its high material standard of living

#53

Post by rbehrends » Mon, Mar 13, 2017, 2:19 AM UTC

scarface74 wrote: post #13

Slightly off topic but is there is a such thing as universal affordable good healthcare? I've talked to a few U.S. citizens that worked abroad who said healthcare in European countries is universally available but the demand outstrips the supply causing longer wait times to get treated than in the U.S. and that they prefer the U.S. system. These are of course people who have good jobs in the U.S. with company provide…

> I've talked to a few U.S. citizens that worked abroad who said healthcare in European countries is universally available but the demand outstrips the supply causing longer wait times to get treated than in the U.S. and that they prefer the U.S. system. These are of course people who have good jobs in the U.S. with company provided coverage. Is that true?

This can be all over the place, depending on what you look at (GP appointments, specialist appointments, emergency and urgent care, elective surgeries, etc.) [1]. In general, the US outperforms some countries, but never all of them, and this is not taking into account that people without access to healthcare may suffer de facto infinite waiting times or that in many countries, people seek out their doctors far more frequently than in the US [2]. "Europe" is definitely not a homogeneous blob (just think of, say, France vs. Bulgaria) and there are great variations between even the affluent EU member states; it is pretty much impossible to generalize.

What we do know is that the US has a fairly low physician density for a developed country [3], though that's not the only factor that goes into waiting times.

[1] Google will show you a fairly large number of studies, but few that cover more than a handful or so of countries and/or more than a few metrics, so it's difficult to get a truly comprehensive overview.

[2] https://www.statista.com/statistics/236589/number-of-doctor-...

[3] http://gamapserver.who.int/gho/interactive_charts/health_wor...

Re: High US health care spending explained by its high material standard of living

#54

Post by white-flame » Mon, Mar 13, 2017, 2:22 AM UTC

malandrew wrote: post #30

arcticbull wrote: post #4

Strange, this neglects that portion of health care spend that is accounted for by profits, by marketing expenses and administrative/billing bloat that ensues. It also neglects that for its massively higher spend 10% of Americans aren't covered and therefore don't receive preventative care yielding massively higher final costs, and it doesn't take into account the WHO ranks the US system as 31st in the world dramatica…

What amazes me is how few people value the value of profits in our system. The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England. Profits provides the impetus for many of the medical advances invented here in the US, and many of these advances find their way to other countries. Because of profits, the US is essenti…

How much medical R&D spending is based on government grants, government-funded university research, and tax incentives, versus reinvesting those profits?

Re: High US health care spending explained by its high material standard of living

#55

Post by [deleted] » Mon, Mar 13, 2017, 3:08 AM UTC

malandrew wrote: post #30

arcticbull wrote: post #4

Strange, this neglects that portion of health care spend that is accounted for by profits, by marketing expenses and administrative/billing bloat that ensues. It also neglects that for its massively higher spend 10% of Americans aren't covered and therefore don't receive preventative care yielding massively higher final costs, and it doesn't take into account the WHO ranks the US system as 31st in the world dramatica…

What amazes me is how few people value the value of profits in our system. The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England. Profits provides the impetus for many of the medical advances invented here in the US, and many of these advances find their way to other countries. Because of profits, the US is essenti…

[deleted]

Re: High US health care spending explained by its high material standard of living

#56

Post by robbiep » Mon, Mar 13, 2017, 3:08 AM UTC

bigger_cheese wrote: post #48

ramparrt wrote: post #17

Earlier quoted context omitted.

The Australian system is far from perfect but does come some way to solving this. It is effectively 2 tiered: 1) Public Medicare, the publicly funded system available to everybody. 2) Private insurance, paid for by the individual and tailored to their needs. To pay for the public system everybody pays a Medicare levy as part of their income tax. The levy is coarsely means tested. If you have private insurance then th…

One thing I don't like about the Australian system is I think it is wasteful in someways. For example under my private cover I'm subsidized for ~$300 a year in optical expenses (split between lenses and frames). From anecdotal conversations I know there are many people who purchase a new pair of glasses every year just because the system is basically set up to encourage this which smells like very wasteful consumptio…

I suggest you stop thinking about it as a benefit and think about what it actually is, which is insurance. My travel insurance is cheaper if I don't cover any lost property, but what if I need it? Anecdotally many young travellers who head overseas 'lose' their $1500 DSLR or their 6 year old macbook when in South America in order to make use of their $300 travel insurance

Re: High US health care spending explained by its high material standard of living

#57

Post by robbiep » Mon, Mar 13, 2017, 3:11 AM UTC

ramparrt wrote: post #17

scarface74 wrote: post #13

Slightly off topic but is there is a such thing as universal affordable good healthcare? I've talked to a few U.S. citizens that worked abroad who said healthcare in European countries is universally available but the demand outstrips the supply causing longer wait times to get treated than in the U.S. and that they prefer the U.S. system. These are of course people who have good jobs in the U.S. with company provide…

The Australian system is far from perfect but does come some way to solving this. It is effectively 2 tiered: 1) Public Medicare, the publicly funded system available to everybody. 2) Private insurance, paid for by the individual and tailored to their needs. To pay for the public system everybody pays a Medicare levy as part of their income tax. The levy is coarsely means tested. If you have private insurance then th…

Having worked in both Public and Private Australian systems as a Dr, and as a Medical Student in the US, I agree with your comments - we have a 'reasonable balance' of a system that does a reasonable job of allocating resources in a reasonable manner. As you say, nothing is perfect and in anything as complicated as healthcare there are going to be inequalities and problems... But even on the healthcare investment side, our Government has made some really intelligent decisions and built some beautiful facilities recently. It is rare that I work in a hospital that has not had a major renovation within the last 5-10 years (or about to undergo a rebuild)

Re: High US health care spending explained by its high material standard of living

#58

Post by arcticbull » Mon, Mar 13, 2017, 3:32 AM UTC

malandrew wrote: post #30

arcticbull wrote: post #4

Strange, this neglects that portion of health care spend that is accounted for by profits, by marketing expenses and administrative/billing bloat that ensues. It also neglects that for its massively higher spend 10% of Americans aren't covered and therefore don't receive preventative care yielding massively higher final costs, and it doesn't take into account the WHO ranks the US system as 31st in the world dramatica…

What amazes me is how few people value the value of profits in our system. The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England. Profits provides the impetus for many of the medical advances invented here in the US, and many of these advances find their way to other countries. Because of profits, the US is essenti…

First, not everything needs a direct and unrestricted profit motive, and I draw the line on that where people don't have a choice whether to engage in a service or not and whether providing that service provides in general a good above and beyond the person in question.

Fire: it's to everyones' benefit if a persons' house catches fire to prevent burning down the neighborhood.

Education: all society benefits from more educated youth.

Prison: all society benefits from remediation of people with criminal tendencies (not punishment, btw, but preventing it from happening again)

Police: everyone benefits from lower crime rates.

Health: everyone benefits when people who are sick are treated to prevent infecting those around them, and people tend not to have a choice in whether they get sick, it's something that happens to them beyond their control.

It's strange to me that people tend to draw the line just before they get to health. They see the benefits to society of everything else on the list being socialized (most do, anyways) but they don't map it to health.

There's no risk of demolishing a profit motive. Canadian doctors get paid upwards of $300,000 per year. Nobody there is suffering. Patents ensure that even when realistically negotiated, drug companies can secure a healthy profit for novel drugs. Drug reasearch often funded by public money.

It's also strange to me that your argument for not covering many Americans is that doing so hurts people beyond the border. You should look out for the broader good but why not look out for yourself and your neighbors first? As much as I'm a globalist I don't think it's worth sacrificing American lives to the nebulous goal of trickle-down healthcare to people outside America. Can you cite some evidence of the effectiveness? I'm not an American, by the way, and I'm all in favor of exporting surplus healthcare, and I feel like you should make sure you've got your house in order first.

Re: High US health care spending explained by its high material standard of living

#59

Post by arcticbull » Mon, Mar 13, 2017, 3:36 AM UTC

malandrew wrote: post #49

throwaway2048 wrote: post #42

Earlier quoted context omitted.

Points like this sound a lot better when its not you that are lacking access to medical care. (Presently) Consequent is not the same thing as nessisary.

As someone with an autoimmune illness that is currently incurable, yes, I do lack access to medical care so to speak. No amount of money in the world can buy me a cure right now. The specialist I currently see is considered the best doctor in the world for my illness because he's the foremost researcher in the world studying it. He's French. He's in the US because the system here provides him with the resources to st…

I'm very sorry to hear that, and I wish you the best.

Think how you'd feel if you were underinsured or uninsured? There'd be no hope at all. In any socialized system I'd be surprised if you didn't have access to the best doctors in the system anyways, as would anyone else in the country regardless of their employment status or net worth.

For every one person like you who is able to take advantage and be covered, how many more are left hopeless and isolated because they are deemed unsuitable for coverage due to their net worth -- effectively the luck of the draw? What of them? I have no interest in taking away your access. I want to make sure everyone else can get it too without fear of financial ruin.

FWIW, at least in Canada, if the government is unable to get you taken care of at home they'll pay for your coverage abroad which I would can only hope would happen to you if somehow your doctor moved back to France if the system were socialized.

The point more broadly is that of Tommy Douglas [1] the guy who brought the Canadian system to being: "I felt that no boy should have to depend either for his leg or his life upon the ability of his parents to raise enough money to bring a first-class surgeon to his bedside."

[1] https://en.wikipedia.org/wiki/Tommy_Douglas

Re: High US health care spending explained by its high material standard of living

#60

Post by bigger_cheese » Mon, Mar 13, 2017, 4:13 AM UTC

robbiep wrote: post #56

bigger_cheese wrote: post #48

Earlier quoted context omitted.

One thing I don't like about the Australian system is I think it is wasteful in someways. For example under my private cover I'm subsidized for ~$300 a year in optical expenses (split between lenses and frames). From anecdotal conversations I know there are many people who purchase a new pair of glasses every year just because the system is basically set up to encourage this which smells like very wasteful consumptio…

I suggest you stop thinking about it as a benefit and think about what it actually is, which is insurance. My travel insurance is cheaper if I don't cover any lost property, but what if I need it? Anecdotally many young travellers who head overseas 'lose' their $1500 DSLR or their 6 year old macbook when in South America in order to make use of their $300 travel insurance

Agreed exactly why I pay for it. The fact it is advertised as a benefit probably contributes to this.

My insurer has gone as far as cold calling me last year "I notice you haven't been claiming any of these benefits, would you like to review your policy."