Economic Analysis of Medicare for All • Hacker News Board

Re: Economic Analysis of Medicare for All

#91

Post by entee » Thu, Dec 06, 2018, 2:24 AM UTC

ArchTypical wrote: post #4

entee wrote: post #2

One thing that sometimes gets lost in the "health care is inefficient" discussion is that one person's inefficiency is another person's living. The cost controls the paper appears to advocate for literally mean someone is making less money, that someone will advocate strongly against it. I've spent the past 3.5 years in healthcare, everyone is convinced they're not the problem, that they're underpaid or overworked or…

> that they're underpaid or overworked or whatever Having family in healthcare and being a lifelong patient due to a congenital defect, a job in software (including management obv) is a breeze compared to health care worker jobs across the board. They require more "schooling" (via mind-numbing training), are underpaid, have much more serious consequences from mistakes, have less oversight, work longer hours and under…

I think primary care workers are generally underpaid and specialists are generally overpaid. That said there's a lot of variation in the data. If you look at some studies of why the US spends more than other countries on healthcare without better outcomes, the difference in prices between the US and other systems is a significant driver. Labor (particularly physicians), drugs and administration costs more here than elsewhere [1]. It's true doctors go through a lot of training, but I'm not terribly sympathetic to stories of a surgeon not being paid enough. Family practice, primary care I'd be more inclined, but even there we spend more than most countries it seems. [EDIT] I'm less sure on what the "blue collar" healthcare workforce (health aides, etc.) wages looks like, I would totally buy that many are underpaid.

Administrative costs are a terrible drag, and I say that knowing that currently I am personally paid by administrative costs. We could bring them more in line to the international norm, but we'd still be substantially more expensive because administrative costs are still not the bulk of total expense.

Drugs are an interesting story because the US effectively subsidizes international drug costs [2]. Also, drugs are a way to stop way more expensive interventions (better to take a $100K drug that cures Hepatitis C than get a liver transplant that will cost far more than that and won't give as good quality of life), so maybe in some ways we should spend more there if the treatments are worthwhile. That said there are disturbing pricing trends in the industry that are clearly exploitative.

In summary, what nationalized systems buy you is fewer administrative costs (good), price controls on medical services (maybe good, but necessarily docs get paid less down the line), price controls on drugs/devices (maybe good, but maybe trade-offs in developing treatments that are less expensive than other interventions). All of the parties involved will be fighting this "efficiency", some more justifiably than others. Who knew healthcare could be so hard?

[1] https://www.hsph.harvard.edu/news/press-releases/labor-pharm...

[2] https://www.vox.com/science-and-health/2016/11/30/12945756/p...

Re: Economic Analysis of Medicare for All

#92

Post by Tyrek » Thu, Dec 06, 2018, 2:33 AM UTC

ekianjo wrote: post #87

AtlasBarfed wrote: post #80

Earlier quoted context omitted.

That's crap, often 80% of the price of a drug is marketing and profit.

Thats only if you consider the drug itself without all the cost of running operations and research. The actual profit margin at the company level is far from 80 percent. I suggest you read annual reports to educate yourself.

I think you're mischaracterizing the costs a little. It's certainly true that Company level profit margin is not in the 80s, but operating income is certainly fairly high. The profits come from compensating the Company for the risk that they have taken, and not necessarily straight for costs. There's certainly room to argue that the pharmas are capturing a too-large slice of the pie, and I personally welcome the debate.

Re: Economic Analysis of Medicare for All

#93

Post by pg_bot » Thu, Dec 06, 2018, 3:09 AM UTC

A lot of issues with America's healthcare system boil down to what I call "the interception problem". A quarterback who throws an interception directly to a defender without a wide receiver in the vicinity is treated the same as someone who hit a receivers hands and was tipped to a defender when you are looking at the stat sheet. Your perception of the analysis changes drastically if you actually observe the actions going on.

I'll take an example from the real world to illustrate my point. When you look at the data, the United States clearly has the highest infant mortality rate of developed countries. On its face it would seem that the United States is clearly failing pregnant women, and that this is a terrible problem that needs to be addressed. However, if you observe the differences between the data sets and actually view how deliveries happen in real life you see a different picture.

Not all pregnancies carry the same risk, and the US has a higher percentage of high risk pregnancies than other countries. If you compare people in the same cohorts the US fares a lot better. In layman's terms, we shouldn't treat an infant death from a 25 year old mother who carried to term the same as one from a 40 year old born a month premature. The US is also the most aggressive country in the world when it comes to attempting to save prematurely born children. We try and succeed at a higher rate than anywhere else in the world. I have failed to meet a person who thinks trying to save a prematurely born child is a bad thing. Yet it's those kind of actions that skew the stats.

We need more advanced medical statistics. I hope the sabermetrics revolution makes its way into the medical field. If more people are interested, I could probably expand my thoughts further with other examples that look bad on the surface, but actually aren't as bad as you think.

Re: Economic Analysis of Medicare for All

#94

Post by acslater00 » Thu, Dec 06, 2018, 3:29 AM UTC

The math here is based on the idea that MFA would reduce the per-person expenditures by 19% (19.2% actually)

(1) 5.9% by unilaterally reducing drug prices by 40% (2) 2.8% by unilaterally reducing medical service prices by 20% (3) 1.5% through the claim that MFA would have fewer "excess services" (4) 9.0% from allegedly increased efficiency due to only having to deal with one payer

Is this at all plausible?

Achieving (1) and (2) would be - um - difficult, to say the least! In real life, prices would be set by a political process. Our actual history of attempts to unilaterally reduce medical reimbursement reates is not promising! [see https://en.wikipedia.org/wiki/Medicare_Sustainable_Growth_Ra... or the debate over Medicare drug price negotiation].

(1) & (2) con't: Imposing a single-payer system and then having that payer set prices is effectively the same as imposing a national price control regime, which we in theory could do without MFA. We have not done this, despite the fact that it would save everyone an enormous amount of money. Why not? Because it would be insanely controversial and take a ton of money out of some people's pockets, especially doctors and nurses. Will this be easier under MFA?

(3) The idea that MFA would be structurally less likely to provide "excess" health services seems pretty optimistic indeed. Our military, for example, is not really known for being budget conscious and aggressively efficiency minded. Nor are our state and local level agencies, e.g. the MTA here in NY. Spending policies are set by a political process, and political processes are prone to over- rather than under- spending in every case I can think of.

(4) The 9%(!) savings from "billing efficiencies" is based on an assumption that billing expenses in medical offices will be reduced by 2/3 when there is only a single payer. Why would this be? Billing expenses scale with the number of bills, not the number of vendors. Will MFA lead to fewer procedures on net? Will it eliminate the concept of prior authorizations, which represent the bulk of these "excess" BIR expenses? Will providers and patients not have coverage disputes? Will MFA have dramatically superior automation than private payers? Note that Germany has a multi-payer system and has Canada-like administrative costs [https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2013....]. There are hidden variables here.

Here's the thing:

The most superficial argument in favor of MFA is to look at a country like Canada and say "Canada spends X / pp on healthcare and they have a single payer system, therefore if the US adopts a single payer system, our costs will drop to X!". That's not real analysis, and it ignores all the cost drivers that have nothing to do with the payer. This paper is a drill-down to component costs, but ultimately is no less superficial. MFA billing will be 65% more efficient because Australia billing is 65% more efficient than the US. Prescription drugs will be 40% cheaper because Canada pays 40% less than the US. And so on.

If you could realize any of these cost savings in MFA, you could realize them now. But you probably can't - not easily, anyway, and after burning all your political capital on a $1T/year tax hike it will only be harder. The cost-savings will be compromised to get the medical industry on board, just like it was during the Obamacare debate. And now you can toss this whole analysis in the garbage.

This is wish-casting dressed up in 200 pages of rigorous-looking analysis, designed to get people to read the abstract, then look at the page count, and then treat it as credible.

MFA is not going to save the system money. Take it to the bank.

Re: Economic Analysis of Medicare for All

#95

Post by jedharris » Thu, Dec 06, 2018, 4:23 AM UTC

rednerrus wrote: post #59

ams6110 wrote: post #21

Earlier quoted context omitted.

Only a few generations ago, healthcare was not so ruinously expensive in the USA. We've never had taxpayer-funded universal care. So what caused the explosion in costs?

The elastic nature of health care costs and the disconnect between the people making the purchases and the people paying the bills. If you have insurance, chances are that you are not asking your doctor how much something is going to cost. You are not likely to shop around or work to get the best deal. As a healthcare provider, where is the incentive to bring costs down.

Also, hospitals typically won't tell you how much something will cost, so you can't shop around even when you are willing to.

Also sometimes hospitals will lie about what they will charge -- happened to my daughter regarding her appendectomy. Should count as fraud.

Re: Economic Analysis of Medicare for All

#96

Post by jedharris » Thu, Dec 06, 2018, 4:31 AM UTC

ams6110 wrote: post #53

DubiousPusher wrote: post #40

It seems to me that industrialized countries the world round have different ways of organizing the relationship between patients, payers and providers. There's nearly 100% public models like the NHS in the UK and hybrid market systems like those in Singapore and Switzerland. But the one thing they all seem to do the same is how they keep costs down. They give the payer, whether that's the government or separate insur…

Price controls cause shortages. Simple economics.

there is always a simple economic reply to every proposal —- neat, plausible, and wrong

Re: Economic Analysis of Medicare for All

#97

Post by ribble » Thu, Dec 06, 2018, 4:34 AM UTC

diego898 wrote: post #15

ribble wrote: post #13

| Medicare for All could reduce total health care spending in the U.S. by nearly 10 percent, to $2.93 trillion, while creating stable access to good care for all U.S. residents. how? by taxing a few earners to pay for everyone else not earning. is that fair? in that light, a ten percent reduction in cost is meaningless.

Can you expand on what you mean by "in that light, a ten percent reduction in cost is meaningless."?

that "ten percent less" of a payment is no longer being paid by particular patients, it's being paid by everyone.

that's like saying, "chris wasn't sick, but don't worry, though 50% of his salary is now gone so everyone has healthcare, he's paying 10% less."

Re: Economic Analysis of Medicare for All

#98

Post by jddj » Thu, Dec 06, 2018, 6:41 AM UTC

jashpool wrote: post #63

s3r3nity wrote: post #39

Earlier quoted context omitted.

More like the doctor who has dropped six-figures + a crazy amount of years in education and certification to work very long hours seeing a lot of patients, many of whom think you're a quack and trust an online forum over anything you say. Oh and don't forget the high premiums for malpractice insurance, as you're working crazy hours without breaks, and if you make a mistake you're sued up the whazoo. And that's just d…

Cost controls also have a cost. The UK NHS has chronic staffing shortages, UK doctors are going abroad for better pay; currently the favourites are Australia, Canada and the Middle East. I have heard quite a few people say they actively discourage their children from being doctors.

Australia and Canada have universal healthcare.

Poor purchasing power / stagnant wages is a problem across all sectors (except finance?) in the UK, not just healthcare.

Re: Economic Analysis of Medicare for All

#99

Post by InclinedPlane » Thu, Dec 06, 2018, 7:22 AM UTC

s3r3nity wrote: post #39

bedhead wrote: post #14

Earlier quoted context omitted.

Like, the living of some drug middleman who is a leach on the system and only exists because of some lobbying or other screwed up structure?

More like the doctor who has dropped six-figures + a crazy amount of years in education and certification to work very long hours seeing a lot of patients, many of whom think you're a quack and trust an online forum over anything you say. Oh and don't forget the high premiums for malpractice insurance, as you're working crazy hours without breaks, and if you make a mistake you're sued up the whazoo. And that's just d…

People will stop making lame arguments pretending that socialized medicine is impossibly unworkable maybe about 30 years after it's been successfully implemented in the US.

Why do we constantly pretend that America is an island universe and ignore that the rest of the developed world has already done this?

Re: Economic Analysis of Medicare for All

#100

Post by gmueckl » Thu, Dec 06, 2018, 7:30 AM UTC

monocasa wrote: post #34

gmueckl wrote: post #27

Earlier quoted context omitted.

So you would trust a random baseband chip to never ever in a thousand years lie to you about the success or failure of its operation or its internal status? Or to behave in an unexpected way that interferes with the core function of the device? E.g. by suddenly sending random junk to the main CPU? How do you verify that the display controller is not acting up and not blanking out a region of the display that contains…

If only. I work in the same town as a big medical device manufacturer, and several co workers over the years had worked there and immediately nope-ed out on moral grounds. Stuff like panics on anything out of the order in a morphine pump that defaults to full on while resetting. Apparently those killed a few people. Meeting the FDA guidelines is more about finding the cheapest way to technically meet the spec rather…

I do get that such a device panics on the smallest error. But then it is supposed to go into a safe mode. "Full on" does not seem safe to me. Full off and emitting an acoustic alarm until it is actively acknowledged would be the right thing to do. Whoever designed this thing to do what it did was frankly a morron.

But gaming the certification process is unfortunately also a thing. In the EU the certification is performed by private companies who are themselves certified by the government for this job. The kicker is that they are competing against each other on a free market. Potentially shopping around for the most lenient certification process could be a thing. I haven't witnessed it yet but it certainly is possible in that system. The thought alone scares me.