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Researchers chart path to drastically lower administrative costs of health care

med.stanford.edu

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Re: Researchers chart path to drastically lower administrative costs of health care

#191

Post by nwah1 »

This speaks about standardizing contracts but neglects to mention that the competing proprietary electronic medical record standards also add cost, complexity, and increase medical errors.

And there are still about 14 other layers of the healthcare onion to peel.

Medical talent is kept artificially scarce thanks to the lobbying and control of licensing by the AMA. We should hand control of licensing over to the AARP and the March of Dimes instead.

Hospitals and insurance have perverse incentives because they are separate. But when insurance and provisioning is combined as with Kaiser Permanente, then incentives are aligned and bureaucracy can be streamlined.

Hospital consortiums currently carve up monopolies within a given piece of turf. We should break that up, and allow a proliferation of low-cost community clinics for less advanced procedures.

And this hasnt even covered obscene pharmaceutical costs, electronic medical device manufacturers, the diagnostic industry oligopoly, and so on.

Re: Researchers chart path to drastically lower administrative costs of health care

#192

Post by King-Aaron »

jostmey wrote: post #2

I agree with the three issues they identify driving up costs. But I fear “Medicare for All” won't fix all the issues, which go much deeper. For example, the US has extremely high standards restricting who can practice medicine compared to the rest of world, limiting the supply of doctors and artificially driving up their demand. There is a need for standards, but perhaps the AMA has too much political influence. Like…

The United State's healthcare don't even appear in any "Top-10 global healthcare" rankings available anywhere, and are consistently overshadowed by many European countries, Singapore, Australia, Japan etc. I don't think you can use "extremely high standards restricting who can practice medicine" as reasoning when it doesn't appear to impact the quality of care at all.

Re: Researchers chart path to drastically lower administrative costs of health care

#193

Post by jjav »

jostmey wrote: post #2

I agree with the three issues they identify driving up costs. But I fear “Medicare for All” won't fix all the issues, which go much deeper. For example, the US has extremely high standards restricting who can practice medicine compared to the rest of world, limiting the supply of doctors and artificially driving up their demand. There is a need for standards, but perhaps the AMA has too much political influence. Like…

> limiting the supply of doctors

Possibly, but the cost of doctors (+nurses, technicians, etc) is in the noise, just a distraction. The vast majority of the cost of medical care in the US goes to the middlemen who contribute no value at all, just extract profit.

A 15 minute session with a general practicioner here (CA) costs around $300. That doctor isn't making $1200/hr ($2.5M/yr).

That doctor is likely only making a bit over 200K: https://www.salary.com/research/salary/benchmark/family-phys...

The other $2M+ are going hangers-on who're not contributing to health care, just inserting themselves into the chain to get rich. Take a look at the billions in revenue collectively by all insurance companies. That's all a tax on health care that provides no value.

Re: Researchers chart path to drastically lower administrative costs of health care

#194

Post by rland »

jjav wrote: post #193
jostmey wrote: post #2

I agree with the three issues they identify driving up costs. But I fear “Medicare for All” won't fix all the issues, which go much deeper. For example, the US has extremely high standards restricting who can practice medicine compared to the rest of world, limiting the supply of doctors and artificially driving up their demand. There is a need for standards, but perhaps the AMA has too much political influence. Like…

> limiting the supply of doctors Possibly, but the cost of doctors (+nurses, technicians, etc) is in the noise, just a distraction. The vast majority of the cost of medical care in the US goes to the middlemen who contribute no value at all, just extract profit. A 15 minute session with a general practicioner here (CA) costs around $300. That doctor isn't making $1200/hr ($2.5M/yr). That doctor is likely only making…

Huh? You'd need to look at billions in profit, not revenue, since insurance does pay out for the cost of care. When you look at that, the margin is actually lower than most industries. It is true that there are a lot of middlemen with hands in the pot but it's not quite that simple.

The biggest driver of healthcare is that Americans just consume a lot of it. We get surgeries, we opt for long, expensive treatments at the end of our lives, we use extremely sophisticated and expensive medical equipment a lot, we pay people to take care of our old people exorbitant sums of money.

Like, in other countries, when your lungs and kidneys start going, you don't go to the hospital for a multiple surgery. When you fall and you can't move around and wipe your own ass, you don't get moved into a facility where people are paid to take care of you, you move in with your family. And, if you don't have those options, you die.

I'm with you that the system is fucked but the underlying reason doesn't _really_ have anything to do with greed in medicine and everything to do with the way that we treat medicine culturally: the duty that children (don't, in this country) have to care for their elders, the attitude we have about prolonging death. That every part of the medical system says: we will never, ever make the decision to let someone pass away, even when "fixing" their problem (of death!) with all the technology and labor we've got turns out to be ludicrously expensive.

Re: Researchers chart path to drastically lower administrative costs of health care

#195

Post by nunie123 »

nwah1 wrote: post #191

This speaks about standardizing contracts but neglects to mention that the competing proprietary electronic medical record standards also add cost, complexity, and increase medical errors. And there are still about 14 other layers of the healthcare onion to peel. Medical talent is kept artificially scarce thanks to the lobbying and control of licensing by the AMA. We should hand control of licensing over to the AARP…

I started a project last week requiring me to learn the proprietary EDI file format that CMS mandates. I was surprised to learn that in order to exchange healthcare data with our government we have to use a file format owned by a private entity. And of course you have to pay to get access to the full implementation documentation.

Re: Researchers chart path to drastically lower administrative costs of health care

#196

Post by AtlasBarfed »

benlivengood wrote: post #110

I worked in a hospital for 13 years. The economic incentives for the current system are quite perverse. The FDA has no cost constraints and so maximizes safety instead of QALYs. Medical equipment and drug manufacturers maximize profit and so fill the highest margin niches first instead of maximizing QALYs. Radiology and lab services are lucrative and separate themselves from clinical providers to maximize profits ins…

Four pigs of health care:

- providers (doctors, hospitals) - drug/device companies - lawyers - insurance companies

All of them point to someone else to blame and defend their part of the trough with knives. All have very developed lobbying arms and are fully entrenched in congressional election funding.

I mean, the Bush Administration started part D medicare. Republicans. An entirely new entitlement.

Re: Researchers chart path to drastically lower administrative costs of health care

#197

Post by AtlasBarfed »

kurthr wrote: post #147
milliondollar wrote: post #109

Their solution in the TFA is to focus on straight-through billing through standardization of payment mechanisms, arguing that each physician is paying $100K / year. Of course, this also puts the lie to the insurance companies, who are the other side of the transaction and essentially add another 20% in cost just to pay the bill! (Their loss ratios due to medical costs are about 80%.) Insurance companies are basically…

One of the big lies is that Insurance Companies have an incentive (aligned with the customer) to lower costs. In fact Insurance Companies have an incentive to pay no more than competition, but for costs to rise. Due to regulated %overhead this is one of the few ways they increase profits every year. To maintain current inflation adjusted stock valuations (based on earnings and growth) Insurance companies need prices…

Agreed, the insurance companies are effectively capped on the profits they can declare, otherwise they'll expose themselves to regulation and stricter price controls.

So that's how places like UnitedHealthCare have such exhorbitant salaries and a bloated executive structure. It's the same as colleges, which also have constantly expanding revenues but are "nonprofit". So a vampiric parasitic management class attach themselves to the organization and suck all the money away, while costs soar.

Re: Researchers chart path to drastically lower administrative costs of health care

#198

Post by jjav »

rland wrote: post #194
jjav wrote: post #193

Earlier quoted context omitted.

> limiting the supply of doctors Possibly, but the cost of doctors (+nurses, technicians, etc) is in the noise, just a distraction. The vast majority of the cost of medical care in the US goes to the middlemen who contribute no value at all, just extract profit. A 15 minute session with a general practicioner here (CA) costs around $300. That doctor isn't making $1200/hr ($2.5M/yr). That doctor is likely only making…

Huh? You'd need to look at billions in profit, not revenue, since insurance does pay out for the cost of care. When you look at that, the margin is actually lower than most industries. It is true that there are a lot of middlemen with hands in the pot but it's not quite that simple. The biggest driver of healthcare is that Americans just consume a lot of it. We get surgeries, we opt for long, expensive treatments at…

> profit, not revenue

No, because profit is substracting all the operating costs of the insurance company, including salaries of hundreds of thousands of paper pushers and multi-million dollar bonuses to their executives. All of this is just overhead that provides no health-care value and can be eliminated.

Re: Researchers chart path to drastically lower administrative costs of health care

#199

Post by nunie123 »

rustybelt wrote: post #162
milliondollar wrote: post #109

Their solution in the TFA is to focus on straight-through billing through standardization of payment mechanisms, arguing that each physician is paying $100K / year. Of course, this also puts the lie to the insurance companies, who are the other side of the transaction and essentially add another 20% in cost just to pay the bill! (Their loss ratios due to medical costs are about 80%.) Insurance companies are basically…

My reaction exactly. This article basically says we can achieve much of the savings of Medicare for all if insurance companies and providers put aside self-interest to voluntarily and in a coordinated manner adopt the aspects of Medicare for all that reduce costs! And if apes had tails they'd be monkeys!

I just started at a health insurance startup that is doing exactly what the article recommends: simplifying billing. Patients pay for procedures "in cash", using a card debiting the insurance company's account. Because doctors charge less for people paying in cash, the insurance is cheaper than traditional insurance.

We're already operating in a few markets. It'll be interesting to see how the traditional insurance companies react once we start significantly encroaching on their market share.

Re: Researchers chart path to drastically lower administrative costs of health care

#200

Post by refurb »

DonnyV wrote: post #164
zanny wrote: post #153

Earlier quoted context omitted.

Have you ever actually had someone on medicare navigate healthcare? Its only partial coverage and the supplemental plans also are partial. Retirees regularly rake up thousands a year in medical expenses on medicare . If anything we need medicaid for all. Its a total mess with the piecemeal systems that exist, but in PA at least (where I live) medicaid recipients pay like a dollar for basically any service. None of th…

Medicare For All is not just an extension of the existing Medicare. It expands it to everyone and fixes some of those holes. Medicaid would still be there for services outside MFA like senior long term care.

So it’s like “defund the police” where they don’t actually mean defund the police?
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