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The US spends more on healthcare for no gain says new report from Johns Hopkins

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Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#231

Post by JAlexoid »

philwelch wrote: post #182
pravda wrote: post #129

Earlier quoted context omitted.

The "freeloading" meme is the creation of public relations groups employed by the pharma industry. Drugs in the US are priced at the profit-maximizing price. That profit-maximizing price has nothing to do with how much pharma earns in other countries. And it has absolutely nothing to do with the cost of R&D. R&D is a sunk cost, has no effect on drug pricing.

And if the anticipated future profit-maximizing price of a new drug isn’t high enough, you don’t fund the R&D and the drug never gets invented.

Yeah. I hear Dr Salk died a multi-billionaire, right? You really need to understand the diminishing returns, when it comes to this issue.

Having $70k HepC healing drug is OK. Having daily medication that's $50 per dose is not, unless the target demographic is exceptionally small.

Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#232

Post by 6nf »

bedhead wrote: post #105

Where does the money go? Aside from the waste and fraud, two places. First, we pay for convenience. We want to see a doctor now . We want immediate access to all the best equipment, and specialists, and drugs, and we don't want to wait around or travel far. And we increasingly want it for every citizen. Second, over treatment of the dying - no subject is more uncomfortable. When asked what the biggest problem Kaiser…

> We want to see a doctor now. We want immediate access to all the best equipment, and specialists, and drugs, and we don't want to wait around or travel far. And we increasingly want it for every citizen.

Australians can get these at a fraction of US prices though

Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#233

Post by refurb »

mikeg8 wrote: post #192
refurb wrote: post #165

Earlier quoted context omitted.

The cost of procedures for Medicare and Medicaid is still much higher than for other countries. Yes, they reduce costs by saying “this is what we’ll pay”, but it’s still much more costly than other countries’ systems.

And I agree with those two sentences - never was arguing that we pay less (compared to other models) in our public markets. But you are not strengthening a counter-point to the conclusion I presented from the book regarding zero price control in conjunction with for-profit insurances which jacks up overall costs through coverage disputes, excess admin work etc, lack of price transparency pre-treatment etc. What is yo…

If you look at the vision correction and plastic surgery markets, you'll see they function quite well! Providers compete on a combination of quality and cost. So I don't think there is anything intrinsic to the free market that suggestion it's to blame for ever increasing prices.

My personal hypothesis is that Americans get a lot more healthcare than most countries provide, combined with higher prices. Not all of it is all that beneficial.

If you want to read something really eye-opening, check out this McKinsey report, bottom of page 14[1] It basically compares US healthcare spending across categories, adjusting for GDP (expecting the US' higher GDP means we spend more).

For inpatient care (hospital care), the US actually spends inline with what other countries spend. For long term and home care, the US spends less than other countries. Same thing with durable medical equipment.

Almost all the "excess spend" is in the outpatient setting. American's get a shit ton of procedures done that other countries just wouldn't do. Have a hernia? Providers in the US fix that, where other countries might say "we'll do something if it becomes a problem" (for example).

[1]https://www.mckinsey.com/~/media/McKinsey/Industries/Healthc...

Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#234

Post by istruble »

EvanAnderson wrote: post #183
arcticfox wrote: post #167

Earlier quoted context omitted.

> As a Bank of America emplyee he had somewhat goog insurance that paid some. He was left with $180,000 bill. Forgive my ignorance but how is that possible? The highest out of pocket maximums for Marketplace plans is $15700 for an entire family.

He may have been traveling when he had his heart attack: https://www.wsj.com/articles/john-stockmans-medical-bills-to... He may have been attended-to by out-of-network practitioner: https://www.nbcwashington.com/news/local/Out-of-Network-ER-S...

Number two for sure. You are almost guaranteed to be seen by an out-of-network provider. It does not matter if you go to an in-network hospital/ER, the providers go out of their way to work a couple hundred miles from home just to bring in the big OON prices. Out of three visits to in-network ERs (in two different states) in the last seven years, how many do you think resulted in crazy charges from OON providers? If you said anything other than all of them you must not be from the states. It is basically impossible not to get fleeced by "health care" in the US.

Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#235

Post by vasili111 »

cmrdporcupine wrote: post #221
DennisP wrote: post #104

Earlier quoted context omitted.

I read that book too, and agree it's phenomenal. It's not just about capping insurance profits. The countries doing the best also have price controls on the healthcare providers. Doctors make a lot less money. On the other hand they generally don't have to pay for medical school. France, Germany, and Japan all have similar systems, according to the book. They have private nonprofit insurance, some kind of mandate to…

One of the problems with the Canadian system is frankly its proximity to the U.S. A large portion of our homegrown medical talent goes immediately south of the border for higher salaries (see your point about price controls on healthcare providers above).

If you need talents to stay in your country then you need to pay them more.

Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#236

Post by ascar »

null000 wrote: post #227
ascar wrote: post #172

Earlier quoted context omitted.

Germany has a split system between mandatory government healthcare and voluntary private healthcare, once you pass a certain income threshold (about 80% above average income) or are self-employed. There are differences. The voluntary insurance usually pays 2x to 3x of the mandatory one and covers more treatments that are seen as optional by the government insurance. E.g. physiotherapy is covered by government insuran…

> Also private patients can usually skip some waiting time (e.g. days instead of a few weeks). See, now, that just really doesn't sound like a good idea to my ears. Why should someone be forced to sit through weeks of suffering while a handful of others don't, for the sole reason that they have more money to throw at the problem? I can understand buying better or more thorough treatment, or buying treatment from more…

Why do you think line-jumping is more immoral than getting worse treatment? In one case you just have to wait in non life-threatening and non-urgent cases (you only have to wait if you actually can wait). In the other case you are actually in a worse physical or mental position.

Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#237

Post by airstrike »

pravda wrote: post #166
airstrike wrote: post #136

Earlier quoted context omitted.

> And it has absolutely nothing to do with the cost of R&D. R&D is a sunk cost, has no effect on drug pricing. That's not how this works. Volume is fixed because you effectively already know how many patients there are and COGS is minimal because drugs are generally very cheap to produce, so price and SG&A are the key drivers to determine returns

To save others the Googling: SG&A = Selling, General and Administrative Expenses. I'm not sure that you disagree with me. The higher the price the higher the returns, but price too high and you earn less money, because volume is not fixed. (I'd bet a lot less Viagra would be sold if it cost $500 per pill.) That was the genius of Martin S. He felt, correctly, that Daraprim was mispriced. That's why the price per pill…

Volume is pretty much fixed for all health related drugs, particularly since your health insurance will foot the bill most of the time. As a patient, you don't care if the drug costs $100 or $1,000 to the insurance company – you want the best treatment available.

Viagra is a different ball of wax since you not taking it will never reduce how many years you'll live.

Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#238

Post by JAlexoid »

rhino369 wrote: post #20
brohoolio wrote: post #8

Earlier quoted context omitted.

I’m not sure what kind of R&D the $800 or whatever it costs now Epipen is paying for. R&D for lobbyists? Or profits because the company gamed the market.

Certainly return on capital investment is considered when deciding whether to invest in R&D.

New drugs and their acceptance by insurance companies is much more important to me, than price gauging. I invest in pharma companies.

The ability to raise the price for a single drug is really the last thing I want in a company I invest. I want long lasting customer base or high impact justifiable expenses, that US HMOs and EU governments will gladly pay(reason why I bought Gilead when I heard about their HepC cure). And Gilead's Truvada strategy, why I divested as a result.

Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#239

Post by roganartu »

lostlogin wrote: post #218
EvanAnderson wrote: post #183

Earlier quoted context omitted.

He may have been traveling when he had his heart attack: https://www.wsj.com/articles/john-stockmans-medical-bills-to... He may have been attended-to by out-of-network practitioner: https://www.nbcwashington.com/news/local/Out-of-Network-ER-S...

What’s with the ‘out-of-network’ thing that gets pulled out regularly? Is healthcare really that much more expensive to an insurer if it’s done at one site or another? Sure, they’d prefer it was done in-house so that the ticket can be clipped multiple times, but it’s clearly just made up numbers that are produced currently.

It's not that it's more expensive at one place or another for the most part. When you go in-network you are seeing providers that your insurance has a contract with. This contract includes agreed amounts for procedures. Providers will often grossly overbill (mostly because it's easier to let the billing backend resolve these limits than bill accurately in the first place) and your insurance will respond with the amount covered. The remaining amount of the bill is written off because it was in-network so the provider is not allowed (by the contract with your insurance) to bill the balance not covered to the patient.

Out-of-network does not have this protection. Your insurance will possibly cover some of the bill, normally up to some percentage of what they consider a normal amount for the procedure in the area, and then you will be billed for the entire balance. Say your provider bills $100k and your insurance says they think that procedure normally only costs $50k and you have 80% out of network coverage. You would be billed for 20% of the $50k covered as coinsurance, plus the remaining $50k that would've been written off if you were in-network.

This is generally how people get surprise bills.

For a real world example: last year my insurance got billed ~$3k for a routine blood test for my wife as part of an annual checkup. It was in-network and the insurance paid $27 and the provider wrote off the rest.

Re: The US spends more on healthcare for no gain says new report from Johns Hopkins

#240

Post by refurb »

pravda wrote: post #129
cameronh90 wrote: post #44

Earlier quoted context omitted.

It does appear to be the case that the US funds most pharma R&D due to Americans overpaying relative to the rest of the word. In some cases (China, India) this is due to weak IP protection, but in other cases (Canada, UK, Europe) it's more to do with our governments having a stronger negotiating position and setting hard limits on what they'll spend for a given benefit to patients. Some characterise this as freeloadi…

The "freeloading" meme is the creation of public relations groups employed by the pharma industry. Drugs in the US are priced at the profit-maximizing price. That profit-maximizing price has nothing to do with how much pharma earns in other countries. And it has absolutely nothing to do with the cost of R&D. R&D is a sunk cost, has no effect on drug pricing.

As someone who works in the industry, you are somewhat correct. Once a drug is approved, it is priced independently of the R&D cost.

However, the decision to bring a drug through clinical trials (the "D" in "R&D") is gated. The potential price of the drug is estimated and the financial costs and potential return are calculated. If the return isn't that great because you can't get the volume or price, the R&D investment isn't made and the drug "dies".

So in other words, price controls on drugs would lower the prices of drugs already approved, but it would likely also kill a number of drugs currently in development.

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