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Fed Up with Drug Companies, Hospitals Decide to Start Their Own

nytimes.com

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Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#31

Post by majormajor »

Thriptic wrote: post #18
programmingpol wrote: post #3

Earlier quoted context omitted.

Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive. The problem with our healthcare system is that too much money goes to drug companies, medical device makers, and insurance companies and not enough makes it to the people actually providing the care. Its a bit…

The real root problems with the system are that a tiny minority of very sick patients account for an overwhelming majority of treatment costs; that it's difficult to prevent this from happening; and that the current care structures make it hard to take early action to incentivize these patients to improve. It also is almost impossible to have a real discussion about this fact because it makes people uncomfortable.

There's a lot of moralizing in this, without numbers justifying it. Show me the evidence that an overwhelming majority of costs come from few recalcitrant bad actors vs things like cancers, expensive surgical or drug remedies of rare diseases, or just plain expensive end-of-life care (a somewhat separate discussion from the others, but a conversation that'll have to be had sometime).

Without that... the costs will always be unevenly distributed due to the nature of illness, that's why the only sane first-step health policy is mandated universal insurance coverage, public or private, since the main question is who is going to get the bad news that they've got the unlucky genes/mutated cells/whatever. Everyone pays in, everyone gets covered if/when they need it.

And if you pay in your whole life and never get seriously ill? That's not a reason to complain, that's a reason to thank your lucky stars you didn't have to deal with being seriously ill or injured! It's not fucking fun, like sick people are trying to get a free ride here.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#32

Post by TillE »

fludlight wrote: post #27

Let's say they succeed in launching a new generics company. Ten years down the line they will divest in order to build each hospital a shiny new geriatrics wing. Within six months the spun-off drug company will jack up prices and the cycle will continue.

From that perspective, does any country have their own publicly owned pharmaceutical manufacturer? It's the kind of thing the NHS should do, since they control most other aspects of health care, but I don't think they do.

There's so little benefit to competition with generics, you may as well have that vertical integration to at least provide what hospitals need.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#33

Post by Feniks »

This is happening in my country and the government has said they'll back any pharmacy deciding to mix the drugs themselves. Healthcare costs are spiralling out of control.

It'll lead to a metric ton of courtcases all the way to Strasbourg and beyond though. The Americans may threaten to invade.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#34

Post by woolvalley »

dangerlibrary wrote: post #5
chimeracoder wrote: post #4

Earlier quoted context omitted.

> Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive. To clarify: Medicare reimburses rates that are below COGS, so hospitals have to increase the amount they charge private insurers in order to make up the loss.

If Medicare rates are actually below cogs, why do hospitals accept Medicare patients? I know some don't, but the vast majority do. Something about that explanation feels off.

If you serve a certain rate of medicare patients, you get additional funding. It's set up this way for 'political' reasons. Like most of us politics, it's a mess.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#35

Post by vkou »

garmaine wrote: post #28
mywittyname wrote: post #13

Earlier quoted context omitted.

Health insurance companies have taken to denying almost every claim that hospitals file. This overtaxes the hospitals claims denial departments and costs hospitals millions in lost revenue because they don't have the staff to properly review and resubmit every claim (which has to be done by a clinical specialist). It's like taking your car to a mechanic, and once it's fixed, refusing to pay, claiming car didn't need…

On the other hand, when I bring my car to an auto shop they give an estimate of cost before actually doing any work.

Your car is unlikely to experience life-threatening complications with a nearly unbounded upper cost while it's being fixed.

Your body is. A routine surgery can absolutely turn into a hundred-thousand-dollar nightmare.

Never mind that a mechanic has a much better understanding of a car, then a doctor does of a human body.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#36

Post by majormajor »

garmaine wrote: post #28
mywittyname wrote: post #13

Earlier quoted context omitted.

Health insurance companies have taken to denying almost every claim that hospitals file. This overtaxes the hospitals claims denial departments and costs hospitals millions in lost revenue because they don't have the staff to properly review and resubmit every claim (which has to be done by a clinical specialist). It's like taking your car to a mechanic, and once it's fixed, refusing to pay, claiming car didn't need…

On the other hand, when I bring my car to an auto shop they give an estimate of cost before actually doing any work.

The people I've known who needed expensive care (high-5-figures or 6-figures) were made well aware of the costs in advance, because at that point the facility wants to make sure your insurance will cover it beforehand. But it doesn't do that much for the patients - comparison shopping doctors and facilities is extremely stressful stuff and a lot of people would rather not think about it, even when some outcome info is available. And the exact details are never known up front, so then you're dealing with "it'll probably cost X more to do it at Y but there's probably a Z percent higher chance of a good outcome..." no-right-answer type serious business decisions.

Emergency care is a different matter, I imagine, insurance-coverage-wise, but pre-approval seems to be fairly widespread for planned stuff these days.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#37

Post by prklmn »

vkou wrote: post #35
garmaine wrote: post #28

Earlier quoted context omitted.

On the other hand, when I bring my car to an auto shop they give an estimate of cost before actually doing any work.

Your car is unlikely to experience life-threatening complications with a nearly unbounded upper cost while it's being fixed. Your body is. A routine surgery can absolutely turn into a hundred-thousand-dollar nightmare. Never mind that a mechanic has a much better understanding of a car, then a doctor does of a human body.

But is the high cost of those surgeries a product of the broken system? I say yes.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#38

Post by majormajor »

fludlight wrote: post #27

Let's say they succeed in launching a new generics company. Ten years down the line they will divest in order to build each hospital a shiny new geriatrics wing. Within six months the spun-off drug company will jack up prices and the cycle will continue.

This is all nice and cynical sounding like HN loves when it comes to big companies, but even then: is that such a bad thing? You have ten years of a lot of people getting cheaper and better access to drugs, and you have a bunch of hospitals getting much-needed capacity increases with state-of-the-art facilities, and you have a proven business model for someone else to come in and take their turn at the money-making wheel.

It's like saying nobody should start a new company cause "best case they'll be another evil surveillance company like Google/Facebook/Microsoft/Amazon, worst case they'll lose all their money."

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#39

Post by nostrademons »

fludlight wrote: post #27

Let's say they succeed in launching a new generics company. Ten years down the line they will divest in order to build each hospital a shiny new geriatrics wing. Within six months the spun-off drug company will jack up prices and the cycle will continue.

That's pretty much the case with all of the economy, though. Industry is dominated by big companies that are overpriced and consumer-hostile; new startup enters that actually delivers a decent product at a decent price; startup becomes wildly popular because it's better than entrenched encumbents; startup founders/investors/early employees want liquidity and either sell to big competitor or go public and are forced to be responsive to shareholders; startup jacks up prices and cuts costs; everybody starts to hate the new big company; the cycle repeats.

Think of it as the full-employment theorem for entrepreneurs, or the social-mobility conveyor belt, or the way in which society stays dynamic & responsive. At least savvy customers get a decade of decent service at reasonable prices, and people (from all backgrounds!) with chutzpah and persistence have a shot at becoming fabulously wealthy.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#40

Post by cheeze »

TrainedMonkey wrote: post #17
pstuart wrote: post #6

Here's a great analysis of the overall problem: http://truecostofhealthcare.org/

This site is sluggish on a pretty beefy laptop. edit: Using Google Chrome Version 63.0.3239.132 (Official Build) (64-bit)

Highjacks my scrolling to make it "smooth" as well...
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