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High US health care spending explained by its high material standard of living

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Re: High US health care spending explained by its high material standard of living

#61

Earlier quoted context omitted.

As someone with an autoimmune illness that is currently incurable, yes, I do lack access to medical care so to speak. No amount of money in the world can buy me a cure right now. The specialist I currently see is considered the best doctor in the world for my illness because he's the foremost researcher in the world studying it. He's French. He's in the US because the system here provides him with the resources to st…

I'm very sorry to hear that, and I wish you the best. Think how you'd feel if you were underinsured or uninsured? There'd be no hope at all. In any socialized system I'd be surprised if you didn't have access to the best doctors in the system anyways, as would anyone else in the country regardless of their employment status or net worth. For every one person like you who is able to take advantage and be covered, how…

No hope at all? If I were underinsured or uninsured, I would still have the option of working to get the insurance I need. If I couldn't afford it, I could still ask others to fund me if they were feeling charitable. Overall, there would still be options. Lack of wealth is not an insurmountable barrier.

Insofar as the best doctors are concerned, they are pretty much all here in the US. Everyone who matters specializing in my illness is in the US. When I lived abroad, I saw a doctor specializing in my illness and the level of knowledge they had relative to the specialists I've seen in the US was laughable. The only medical care I've had abroad (I've lived on three different continents in my life) that was comparable cost as much as healthcare in the US.

There may be a few countries that are exceptions in terms of the socialized medical care available, but I would be surprised if any were as genetically heterogenous as the US or had a population even 1/5 of the US.

One of the main problems in the US is that there isn't a clear way to compare health insurance policies. You can't exactly go out and say, I want health insurance that covers the 90% of the most likely issues I'd most likely be afflicted with for one price or choose one that covers 99.99% of the things for another price. That lack of comparability and enforcement of payout is what lacks. If these features existed in the market, it would be possible to find insurance at $50 a month all the way to $500 a month. Transparency and comparability would make the market function much better. Something that covers 90% of the things that could go wrong is already way way way better than whatever the richest could afford 50 years ago.

Your point about Canada is only worthwhile if another country exists where you want to be treated. If the US socialized medical care and ended up with a system comparable to Canada, all of a sudden that option wouldn't be all that useful because you've lost the best market in the world for providing care that Canada can't.

The US subsidizes everyone research on behalf of all people in other countries. Maybe the rest of the world can find it in their heart to help those in the US that lack healthcare instead of lecturing us on how our system is broken when it already does so much for medical progress for the entirety of humanity.

Something like 95% of all drugs developed are developed in the US. I went to a university where many of my colleagues went on to join companies that were creating the most advanced medical textiles available, such as artificial aortas and whatnot.

Re: High US health care spending explained by its high material standard of living

#62

Earlier quoted context omitted.

What amazes me is how few people value the value of profits in our system. The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England. Profits provides the impetus for many of the medical advances invented here in the US, and many of these advances find their way to other countries. Because of profits, the US is essenti…

First, not everything needs a direct and unrestricted profit motive, and I draw the line on that where people don't have a choice whether to engage in a service or not and whether providing that service provides in general a good above and beyond the person in question. Fire: it's to everyones' benefit if a persons' house catches fire to prevent burning down the neighborhood. Education: all society benefits from more…

What percent of new medicines and treatments developed are developed in Canada? How does that compare to the US?

Re: High US health care spending explained by its high material standard of living

#63

Earlier quoted context omitted.

What amazes me is how few people value the value of profits in our system. The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England. Profits provides the impetus for many of the medical advances invented here in the US, and many of these advances find their way to other countries. Because of profits, the US is essenti…

> The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England. These seem to be academic publications and according to this Quora post [1], it's primarily driven by American universities and research institutes. It is not entirely clear to me how profits within the US would be a major factor here: I would have thought th…

What percent of new medicines and treatments developed are developed in the UK? How does that compare to the US?

Re: High US health care spending explained by its high material standard of living

#64

Earlier quoted context omitted.

What amazes me is how few people value the value of profits in our system. The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England. Profits provides the impetus for many of the medical advances invented here in the US, and many of these advances find their way to other countries. Because of profits, the US is essenti…

How much medical R&D spending is based on government grants, government-funded university research, and tax incentives, versus reinvesting those profits?

How many of those contributors to medical R&D have actually brought new drugs and new treatments all the way to market?

The D in R&D dwarfs the R.

Re: High US health care spending explained by its high material standard of living

#65

Earlier quoted context omitted.

> The US is responsible for ~40% of the world's output in terms of medical research, which is 10x the country with the second largest amount of output, England. These seem to be academic publications and according to this Quora post [1], it's primarily driven by American universities and research institutes. It is not entirely clear to me how profits within the US would be a major factor here: I would have thought th…

What percent of new medicines and treatments developed are developed in the UK? How does that compare to the US?

I don't know, and the UK may not even take a dominant role here (as the commercial research infrastructure is very likely to be different). We'd also have to account for the fact that a lot of drug development goes into drugs that do not provide any novel treatments, but merely exist because somebody wants a share out of a big market (e.g., Viagra alternatives) or to find a replacement drug that can be patented to sell in lieu of a drug where patent protection is running out (which doesn't work too well in countries with reference pricing, but reference pricing is still uncommon in the US, and the US practice of prescription drug advertising doesn't help, either).

In any event, if you want to make such a claim, it's up to you to support it. I was merely pointing out that your argument is fairly incomplete as it stands. It doesn't even address the question whether it may be due to economic clustering effects or a superior bioscience infrastructure in America; after all, if selling drugs in the US were so profitable and that was the cause of research, that would also spark research in other countries.

Re: High US health care spending explained by its high material standard of living

#66

Earlier quoted context omitted.

First, not everything needs a direct and unrestricted profit motive, and I draw the line on that where people don't have a choice whether to engage in a service or not and whether providing that service provides in general a good above and beyond the person in question. Fire: it's to everyones' benefit if a persons' house catches fire to prevent burning down the neighborhood. Education: all society benefits from more…

What percent of new medicines and treatments developed are developed in Canada? How does that compare to the US?

Based on conversations in other threads, it has been posited that it isn't the profit motive pushing that but rather the US governments' heavy investment in drug research [1], [2].

Canada doesn't have a big drug sector to the best of my knowledge though playing along, plenty of countries with socialized medicine do:

Denmark has Novo Nordisk.

Germany has Boeringer Ingelheim and Bayer.

Switzerland has Roche.

Astra/Zeneca is Swedish/British.

GlaxoSmithKlein is British.

Sanofi is French.

Novartis is Swiss.

Actually, of the top 10 by revenue, only two (Johnson and Johnson, and Pfizer, #1 and #3 respectively) are American. All the rest are European. Assuming based on the references that development has more to do with funding, I'm willing to bet the EU spends an awful lot.

[1] http://abcnews.go.com/WNT/YourMoney/story?id=129651

[2] http://undsci.berkeley.edu/article/who_pays

Re: High US health care spending explained by its high material standard of living

#67

Earlier quoted context omitted.

I'm very sorry to hear that, and I wish you the best. Think how you'd feel if you were underinsured or uninsured? There'd be no hope at all. In any socialized system I'd be surprised if you didn't have access to the best doctors in the system anyways, as would anyone else in the country regardless of their employment status or net worth. For every one person like you who is able to take advantage and be covered, how…

No hope at all? If I were underinsured or uninsured, I would still have the option of working to get the insurance I need. If I couldn't afford it, I could still ask others to fund me if they were feeling charitable. Overall, there would still be options. Lack of wealth is not an insurmountable barrier. Insofar as the best doctors are concerned, they are pretty much all here in the US. Everyone who matters specializi…

>> No hope at all? If I were underinsured or uninsured, I would still have the option of working to get the insurance I need. If I couldn't afford it, I could still ask others to fund me if they were feeling charitable. Overall, there would still be options. Lack of wealth is not an insurmountable barrier.

What if you had a disease that left you unable to do that? Physically, mentally? You can't work, you don't know people, now what? Why should society deem that life not worthy of saving because of an illness and a bank account balance? It's not civilized. Why should these people depend on the charity of a few individuals and not distribute that burden across society as a minimum guarantee?

>> One of the main problems in the US is that there isn't a clear way to compare health insurance policies.

IMO it doesn't make sense to. You can't know what kind of disease you'll get or when. How can you choose to exclude cover for a broken leg? Are you planning on walking extra carefully, or buying special boots? And why settle for a 90% plan to prop up the health insurance industry when you can give everyone the 100% deal?

>> Your point about Canada is only worthwhile if another country exists where you want to be treated.

The way I see it, it goes one of two ways. (1) everyone has socialized medicine, the doctors are equally distributed but you can still find them [no passionate doctor worth their salt will just pack their bags up rather than treat everyone] or (2) one or more countries exist where they congregate due to lack of socialized medicine, and you're free to travel there if you find the home country offerings unsuitable.

Also, many of the best hospitals anywhere in the world are in Germany, Hong Kong, Singapore, etc.

>> The US subsidizes everyone research on behalf of all people in other countries.

The US government subsidizes the research heavily (as do foreign countries) it's not re-invested proceeds. [1]

[1] http://undsci.berkeley.edu/article/who_pays

Re: High US health care spending explained by its high material standard of living

#68
post #51

Earlier quoted context omitted.

No, what he's saying is the reason (health care consumption / GDP per capita) is abnormally high in the US is the probably same as the reason that (all consumption / gdp per capita) is abnormally high in the US. That's not circular. It's merely pointing to an underlying cause that is probably not specific to the health care system.

If it's not specific to the healthcare system, price increases should mirror inflation. The underlying cause being high material standard of living? Because that is why it's circular logic to me. I still have a problem with using the end economic result data. It _automatically_ assumes that price increases are called for based on the market. If all firms in an industry can raise prices at the micro level, then no fir…

I wrote the blog post. Some of these broader patterns do relate to Baumol's cost disease, i.e., health and other service typically do not see productivity increases at the same rate as manufactured products, agricultural produce, and wages in these services will tend to reflect increasing wages in other parts of the economy (especially skilled ones), but mostly this is about increasing volume, i.e., quantitive and qualitative increase in health goods and services.

This empirical regularity can be explained by the fact that as countries get rich they attach increasing value to human life _and_ they experience diminishing marginal utility with most other consumption expenditures (an extra year of life, even discounted, can be worth a lot more than buying yet another bauble, a few more sqft in housing, etc)

"Profits" as such are unlikely to explain more than a tiny fraction of this as (1) for-profit sector isn't that large in the health care space (2) their cost profile is generally very similar to government and non-profit alternatives (3) the patterns generally have relatively little to do with true price increases/inflation. Further, even removing profit per se from the equation does not mean that problems of this sort necessarily disappear. Principal-agent problems abound, even a physician on state payroll doesn't necessarily have their incentives well aligned with the interests of their patients.

Re: High US health care spending explained by its high material standard of living

#69

Earlier quoted context omitted.

How much medical R&D spending is based on government grants, government-funded university research, and tax incentives, versus reinvesting those profits?

How many of those contributors to medical R&D have actually brought new drugs and new treatments all the way to market? The D in R&D dwarfs the R.

Oh give over, without the R there is no D.

Re: High US health care spending explained by its high material standard of living

#70
post #23

Earlier quoted context omitted.

I assume patient satisfaction only takes into account people who managed to become patients, and doesn't include people in the U.S. who needed treatment but couldn't get it.

Why assume when you can read the report?

Because the report is 215 pages, searching for "satisfaction" doesn't produce anything useful, and most other surveys I've seen use the metrics in that way.
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