Friday, January 13, 2017

America is getting Ripped Off on Healthcare

"...the cost of the US health care system is roughly twice that in GDP terms of that of other advanced economies, yet delivers worse results.

Despite having the most expensive health care system, the United States ranks last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity, and healthy lives...

the U.S. stands out for having the highest costs and lowest performance—the U.S. spent $8,508 per person on health care in 2011, compared with $3,406 in the United Kingdom, which ranked first overall.

...The causes include:

A pay-for-piecework system that rewards doctors for over-treatment. These incentives are reinforced by encouraging patients to expect too much of doctors and demand surgeries and medications rather than accept that they may have to live with limitations or a slow recovery...

Similarly, I’ve been appalled when I visit doctors and mention what I consider to be a minor complaint that they almost universally regard it as a request for meds and are creepily eager to provide them.

And ads like this only encourage this sort of thing...

Drug company rent extraction. The US funds a huge amount of basic R&D and demands way too little. Big Pharma has succeeded in creating an intellectual property regime that makes it more attractive to milk existing patents and cheat on drug marketing than discover new drugs. Over 85% of the so-called new drug applications for the last 15 years have been for extensions of patents on existing drugs based on minor reformulations. The industry also spends more on marketing than R&D, and you can be sure that the beancounters allocate as much overhead as possible to R&D. Yet they’ve managed to con much of the public and complicit legislators that they need fat profits to “innovate” when they instead go to CEO and executive bonuses

Even worse, drug company marketing abuses kill people on a large scale basis. Vioxx and Oxycontin are poster children.

Needless insurance company costs and burdening of doctors with unnecessary admin work. One of the big reasons for the shortage of primary care physicians is the every-rising hassle of dealing with insurance companies. My impression is most doctors spend a day a week fighting to get paid, on top of having to pay staff to deal with paperwork...

...anyone who is sick should avoid a hospital stay unless there is no other choice.

...Obama made his health care “reform” all about institutionalizing the medical industrial complex looting. 

The bill was written by health care industry lobbyists.

Drug company and insurer stocks both rose when it was passed. 

Even though insurers are whinging on how they are having a hard time making enough money on Obamacare exchange plans (and this serves as their excuse for dropping them and/or raising premiums), the press seldom mentions that they made out handsomely on Medicaid expansion. And let us not forget that Obamacare also barred drug reimportation from Canada.

So having chosen to misuse a once-in-a-generation opportunity to have a go at the fundamental problems of a clearly broken health care system, Obama, as he did with the banks, sided with powerful incumbents at the expense of ordinary Americans. Some people may perceive that they have been helped, but I wonder how many have road tested their coverage via suffering a serious mishap. As readers know too well (and many have told us), if you are hit by a bus and get taken to an emergency room not in your network, the costs are all on your dime. Even if you schedule an operation in network, it is impossible to prevent the hospital from gaming the system and scheduling practitioners who are not in network as part of the team so as to run up a bigger tab (lawyers have told us you can contest the bill successfully if you’ve demanded that they schedule only in-network professionals and they agree, but why should people who are having to deal with the stress of recovery from a major procedure be put through fights like that?). As we’ve also discussed, many insurers are effectively excluding pre-existing conditions via narrow networks that do not include specialists that can treat them.

...1% of patients account for 21% of health care costs, far worse than the usual 80/20 rule, it conflates that with the pre-existing conditions problem, when end-of-life care is a big ticket item included in those figures.

Nobel Prize winner Angus Deaton stated clearly what is wrong. The American health care system “seems optimally designed for rent seeking and very poorly designed to improve people’s health.” 

And nothing is going to get better until we tackle that problem head on.

http://www.nakedcapitalism.com/2017/01/debate-health-care-yet-omits-elephants-room-excessive-costs-due-terrible-incentives-pricing-administrative-costs-pharma-looting.html
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