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The American Healthcare Conundrum

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Re: The American Healthcare Conundrum

#361

Post by mexicocitinluez »

kstrauser wrote: post #167
conductr wrote: post #51

Medicare prices are too low to operate on. They generally factor in the bare minimum or slightly less for the variable costs of a procedure but severely under value the fixed costs of providing the same procedure. So those costs largely get pushed to commercial payors as those are the only ones who can shoulder it. There’s plenty of arguements about waste and executive compensation but when I was a healthcare CFO we…

Sure you’re not thinking of Medicaid? Medicare was generally pretty good for reimbursement. When my wife treated Medicaid patients, she often lost money on the cost of the supplies used to treat them, let alone rent and paying the staff etc etc. Most doctors who see Medicaid patients do it as basically pro bono. Some figured out how to game the system with economies of scale but it’s nearly impossible do do and maint…

> But Medi care was right with the commercial insurers on reimbursement.

As I said in another comment, I'm with a provider and Medicare is easily one of our best payors. We actually have contracts with private insurers that say they have to reimburse us at least 80-85% of what Medicare would. They also give us the money up front, with a public formula that we can count on vs. a hidden formula that requires us to go back for more auth (and thus needs more people to manage).

Re: The American Healthcare Conundrum

#362

Post by mexicocitinluez »

conductr wrote: post #179
kstrauser wrote: post #167

Earlier quoted context omitted.

Sure you’re not thinking of Medicaid? Medicare was generally pretty good for reimbursement. When my wife treated Medicaid patients, she often lost money on the cost of the supplies used to treat them, let alone rent and paying the staff etc etc. Most doctors who see Medicaid patients do it as basically pro bono. Some figured out how to game the system with economies of scale but it’s nearly impossible do do and maint…

Medicaid is usually a big loss for hospitals. It’s just a cost of doing business and another reason why someone else has to pay more. It’s completely a subsidy essentially. This is why certain areas only have a county hospital, it’s likely the same area that is a food desert and has no retail banks, the simple truth is too high of a Medicaid mix will quickly sink a for profit hospital. Medicare is as I described. Eve…

> Executives like to lament the lose money on Medicare but I never really saw it that way.

We're in the totally opposite boat. We actually prefer Medicare patients vs private insurance not only because of the reimbursement, but the way in which they reimburse us (one lump sum vs visit-by-visit auth that requires manpower to manage).

Some of the requirements can be onerous, but on the whole, they're easier to plan for than the private stuff.

Re: The American Healthcare Conundrum

#363

Post by alexfoo »

arethuza wrote: post #357
alexfoo wrote: post #347

Earlier quoted context omitted.

This always baffles me. There’s so much rampant profiteering in the US healthcare system it’s unbelievable. Other countries look at it from afar in utter disbelief. I’m glad I had no serious health problems when I lived there 25 years ago (and I had health insurance via my employer). In the UK prescriptions are effectively capped at about USD125 per year: https://www.nhsbsa.nhs.uk/help-nhs-prescription-costs/nhs-pr..…

In Scotland and, I think, Wales there are no subscription charges at all.

Ah yes, forgot about that.

The regional differences are quite odd.

I got my ADHD diagnosis via Right-To-Choose, so it is considered an NHS diagnosis and I get my medication via the NHS (and therefore cheap). But the RTC pathway isn't available in Wales/Scotland/NI. I'd either have to wait years for an NHS diagnosis or go private and then have to pay £££ for my prescriptions privately.

The UK system has many problems but at least the general population are shielded from the exorbitant individual costs. We pay for it through general taxation but that, at least, spreads the load a bit.

Re: The American Healthcare Conundrum

#364

Post by gorbachev »

linsomniac wrote: post #244

Healthcare administrative overhead in the US is pretty huge and has been for a long time. Back in the early 90s I worked on claim processing software and I recall it being discussed as being around a third of healthcare costs. Last year this podcast said that nobody wants to solve this because solving it is going to eliminate (IIRC) hundreds of thousands of jobs. Which is a point to consider. In 2021, the U.S. spent…

> Last year this podcast said that nobody wants to solve this because solving it is going to eliminate (IIRC) hundreds of thousands of jobs. Which is a point to consider.

Yet we're ok with spending trillions on AI to eliminate jobs everywhere, including healthcare.

I don't think that's the reason.

Personally I'm of the opinion the reason it isn't being solved, is because the people whose job it would be to solve it get to keep their jobs due to donations from pharma and insurance companies.

Re: The American Healthcare Conundrum

#365

Post by IntrepidPig »

andai wrote: post #202

Is the author GPT-5?

Probably so. The table heading “Key Finding” smells rankly of LLM, plus the massive overconfidence that they’ve single-handedly figured out the problem with American healthcare with a little data science that only an LLM or a schizophrenic could be capable of (I haven’t read anything beyond the first part of the README because I don’t waste my time with slop, but I’m assuming they’re ignoring the incentive structures which encourage the system to stay this way), plus the simple fact that they call out a completely meaningless $3T gap that doesn’t account for population difference at all. It’s so strange because they mention the per capita difference right before that. That’s the number that matters. But still they go on and say $3T gap, and even measure the issues in terms of a percentage of that $3T gap. It’s nonsensical, right? I’m really tired of this.

Re: The American Healthcare Conundrum

#366

Post by onlyrealcuzzo »

TuringNYC wrote: post #327

The problems are so vast it is difficult to even describe to outsiders. For example, if I purchase a particular medication at a local pharmacy, it costs $25. However, my insurer mandates that I purchase it via their Pharmacy Benefit Managers (PBM) Optum, which charges $125. Easy enough right, you price shop? Well then it doesnt count towards your deductible. The whole thing is an elaborate trap to not pay. Sometimes…

Health care is so broken that I think it will unbreak itself.

You can eliminate most of the problem by mandating true cost billing by hospitals (get rid of their insurance mandated 500%+ markups to make it look like your insurance does anything at all besides make your care as costly as possible).

As you said, it's oftentimes cheaper to buy drugs without insurance.

The average person would quickly find out that insurance doesn't pay for anything at the hospital (most of the time).

~80% of healthcare spending is already at the tail end, and the state already covers most of that through Medicare and Medicaid.

The bottom ~50% of spenders (healthy people) only spend ~3% in total of healthcare (~$900 per year per person, about 1 month's PREMIUM).

Health insurance is a MASSIVE tax on the bottom ~3% of spenders (~50% of the population), when the state ALREADY covers the vast majority of people that need covered for tail end expenses.

Think about this: the MEDIAN adult in the US pays We already have the European model. Health insurance as it is is a tax. It just could not be designed to function more poorly than it does for the average healthy worker.

It benefits literally no one besides the health insurance industry which does not employ that many people, and is not strategically important for national security.

If the state completely covered the tail, and we had true billing at hospitals, almost no one would need or want insurance besides people that already have it through Medicare and Medicaid.

Re: The American Healthcare Conundrum

#367

Post by dabiged »

alexfoo wrote: post #359
Turskarama wrote: post #353

Earlier quoted context omitted.

> In many ways the quality of care in the US is far better than what folks get elsewhere, which in part is probably why there isn’t a total patient rebellion How sure of this are we really? Other countries mostly have problems with emergency departments being full, but that's less because those emergency departments are worse and more because in the US people aren't going, they just stay home and hope they don't die.

I guess that's because many/most countries don't have the concept of a private emergency department. It doesn't really matter how much money you have if you have a broken leg as you'll be queuing up with everyone else for the triage and initial treatment. I have amazing private healthcare coverage in the UK through my employer. I've had certain treatments done in under a week where the NHS waiting lists for the same…

Australia reporting in.

We have private emergency rooms. We call them urgent care and you can go and see a qualified physician with allied health services (radiology, pathology). If they can fix you up they will. If not you get transferred via ambulance to the nearest public hospital and triaged as required.

I took my kid to one last weekend as they had been diagnosed by our family Dr as having pneumonia. The emergency physician ordered chest x-ray and full suite of pathology and we had results in less time than we would have waited in the public hospital waiting room. Yes we paid.

Re: The American Healthcare Conundrum

#368

Post by youknownothing »

Turskarama wrote: post #353
cmiles8 wrote: post #337

Earlier quoted context omitted.

Prescriptions are a total racket. A good portion of actual medication literally costs a few dollars at most. Then there’s layer upon layer of bloat and bureaucracy that add no value but drive the cost up 10x or more. It’s totally bonkers. When these Rx cards and Marc Cuban CostPlus drugs came out where you just pay cash and a fraction of the price I thought there must be some catch or scam here. But turns out no, the…

> In many ways the quality of care in the US is far better than what folks get elsewhere, which in part is probably why there isn’t a total patient rebellion How sure of this are we really? Other countries mostly have problems with emergency departments being full, but that's less because those emergency departments are worse and more because in the US people aren't going, they just stay home and hope they don't die.

As a person who has lived in Spain, UK, and now California, I can attest to one thing: the quality of care in California (I can't speak for the whole country) is vastly superior to what I received in both Spain and UK.

Sate-sponsored universal healthcare is amazing, I love the concept, but it also means that they have to run it like a very stingy HMO. They have a rulebook and they go by it, if your case is even the slightest out of their parameters, tough luck. And don't you dare ask for a second opinion, you'll get the doctor that has been assigned to you and accept whatever they tell you. I could bore you with countless stories of doctors who have used tricks not to provide service and make it look like it was the patient's fault.

The problem with private healthcare is that profits corrupts it. The problem with public healthcare is that politics corrupts it. There is no good solution.

Re: The American Healthcare Conundrum

#369

Post by steveBK123 »

linsomniac wrote: post #244

Healthcare administrative overhead in the US is pretty huge and has been for a long time. Back in the early 90s I worked on claim processing software and I recall it being discussed as being around a third of healthcare costs. Last year this podcast said that nobody wants to solve this because solving it is going to eliminate (IIRC) hundreds of thousands of jobs. Which is a point to consider. In 2021, the U.S. spent…

Middle men in processes add overhead, but on various analyses I've seen.. zeroing all middleman (insurance, PBM, etc) out still leaves us as far more expensive than the rest of the rich world.

One thing which is not terribly popular to point out is that at least on procedure pricing - wages are way way higher here. Some of that is that education is far more expensive so then we need to pay very well to pay that down. Also we have a cartel that limits the number of medical graduates.

NYC have been striking and to quote the union-friendly NYT "The three hospital systems affected by the strike said their nurses on average make about $160,000 a year and are seeking raises that could propel nurses’ salaries on average past $200,000, according to the hospitals."

By comparison UK pays nurses like US blue state fast food workers. Per google - "Average nurse salaries in London are the highest in the UK, generally ranging from £37,000 to £55,000 per year." Note NYC minimum wage is at $17/hr though many hospitality workers in the $20s, with a renewed Mamdani push to $30/hr minimum.

And US tax rates at these 3-4x higher compensation levels are same/lower than the UK..

Then add Americans having generally unhealthier lifestyles, being more litigious requiring higher malpractice insurance, etc..

Re: The American Healthcare Conundrum

#370

Post by dv_dt »

mdorazio wrote: post #350
dv_dt wrote: post #296

Earlier quoted context omitted.

Every time Ive looked into it marketing is more than half of the costs of US pharma companies - and I would suspect even more as don't know if there has much work to unmask even more of that spending via channels that can occur in ways not obviously marked as marketing or at least are really not core to research and manufacturing. e.g. is all the "discount coupon" pharmacy rigamarole considered marketing or administr…

This is not correct. Here's Pfizer's 2025 annual report [1]. Total expenses for the year were $55.1 billion. Advertising expenses were $2.7 billion of that, or just under 5%. R&D expenses were $12.1 billion, or just under 22%. They do have a lot of SG&A, but the large majority of that is not going to marketing. [1] https://d18rn0p25nwr6d.cloudfront.net/CIK-0000078003/908eb6a...

Advertising is only a subset of marketing. From that doc, look at operating costs: SGA was ~$11B and R&D ~$12B - basically 50/50. Pfizer is very international, so is pretty difficult to break out US operating costs and what marketing vs R&D is for just the US. But one can also assume US marketing is higher than any other nation as direct-to-consumer advertising is primarily only allowed in the US.
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