Where is the money in US healthcare going to?

From what I hear people love to sue their doctors over there. Is the money burned on that included in the healthcare costs though?

Laws are made to be broken. You're next, thermodynamics.

Probably, due to malpractice insurance rates.

Malpractice insurance drives costs up. As does the cost of litigation.

The largest problem is billing and administering costs. I used to do insurance paperwork and all the billing errors and forms take time and money. Don't get sick because the paperwork's a killer.

There are three main problems that are driving costs:

• A focus on treatment instead of prevention. Don't get your unides in a twist, everyone is to blame for this. Poor diet and exercise, people not seeing their doctor on a regular basis.

• Malpractice: it drives costs up and the patients require lots of care.

• technology or the lack thereof. The medical industry is in search of the "next big thing" they can prescribe to make $$ and save time. Sadly, many conditions need chronic care or need the face to face time that costs lots of money and require effort to do. Many doctors and hospitals are creatures of habit and use outdated drugs or techniques not just because they are cheaper, but they know them. Keeping current is hard.

The elephant in the room is the size and longevity of the US population. We're living longer, with chronic conditions or the problems of aging. That takes money, lots of money for elderly patients. many nursing homes take all their client's assets to pay for care, from 401K's to selling the client's house because the care is that expensive. With 50 states (and the territories) there are 50+ public health problems that are unique. Oftentimes government just spends money without thinking.

There was a case in Atlanta GA where children living in public housing had terrible rat bites. Time, effort and money was spent on treating the rat bites. Then some boffin said "let's put traps to catch the rats instead". For years no one had thought of that.

All night at the computer, cuz people ain't that great. I keep to myself so I won't be on The First 48

You know one of the biggest causes of this? The insurance model itself. Health insurance being tied to employment the way it is, most people end up switching insurance providers every time they change jobs. The odds are pretty low that the same company which pays for preventative healthcare will be the one to reap the savings later on. So they're reluctant to cover prevention, because they'd just be saving money for their competitors.

This is one of the main arguments for single-payer.

I'm in the military, single payer ain't all it's cracked up to be.

The problems with any large organization is administering the records. The payor will screw the payee, insurance, government it don't matter they want it done on the cheap.

Many docs won't take tricare despite it's backing by Uncle Sam because they hate the paperwork and the fee caps.

Some docs are just taking cash instead and finding costs go down without the paperwork.

Punish docs who won't take your single payer insurance and they'll leave medicine. We already have a doctor shortage.

Prevention pays off in the long term, it's hard for people to wrap their brains around. I'm not just talking preventative care, I'm talking about public health measures too.

edited 20th Jun '13 10:41:55 AM by TairaMai

All night at the computer, cuz people ain't that great. I keep to myself so I won't be on The First 48

To do what? They aren't going to throw away all those years of medical school, it's only on the US that they have to option to practise medicine without being part of a single payer system. There's nowhere in the Western world that they can go, so if the US went single payer the docs wouldn't be able to practice medicine (in the West) without having to be part of such a system. Plus if this was true, the US would be full of doctors fleeing from single payer countries.

“And the Bunny nails it!” ~ Gabrael “If the UN can get through a day without everyone strangling everyone else so can we.” ~ Cyran

Many go on to engineering, other professions. We have an exodus of doctors right now. There are some Canadian docs and nurses who've moved to the US. Mostly the problem lies in our screwed up immigration system. Many qualified docs are denied because the US won't recognize foreign degrees or the cost of insurance and certification is too high.

Forbes article on US doctor shortage.

CNN.com article on US doctors leaving medicine. (one chiropractor is now a gun store owner).

1 in 3 Physicians Plans to Quit Within 10 Years

and on the flip side, a doctor asks: Why Are Primary Doctors Thinking about Leaving Medicine? and says take it with a grain of salt until more data is in.

edited 20th Jun '13 12:01:17 PM by TairaMai

All night at the computer, cuz people ain't that great. I keep to myself so I won't be on The First 48

FTFY. For case studies, I point to Congress sending funds for the troops to DOD kickback projects and Ontario's public health system getting savaged during the Mike Harris years.

Share it so that people can get into this conversation, 'cause we're not the only ones who think like this.

Love'em or hate'em, Big Pharma and the Insurance industry work hand in glove with Uncle Sam and all the States and Territories. Who runs Medicaid SALUD in NM? HMO's do. Guess who's on the "healthcare exchanges" the ACA set up?

Yuppers.

Single payer won't fix the problem, if anything it'll make it worse as Gov'ment auditors deny care to ruthlessly cut costs and hire the HMO's and insurance companies to run the system because no one in any executive department has the skillset to run it. That's why an HMO runs medicaid in NM.

Private insurance was overbilling the state and then complaining that providers were running up the bills (yes you read that right). The State in turn said "We need to control costs". This was during the Clinton years and at one point the NM model was considered as part of "Hillary Care"[tm].

So the state of NM turned medicaid over to the various HMO's.

And no, the costs still haven't gone down.

Oh, my bad, they are not HMO's anymore, they are "Managed Care Organizations" to quote the Health Dept. Newspeak.

edited 20th Jun '13 3:16:34 PM by TairaMai

All night at the computer, cuz people ain't that great. I keep to myself so I won't be on The First 48

Funny how that's not actually what happens in countries that implement single payer. We had 8 years of government in the province of Ontario with the deliberate goal of sabotaging the public system. That's what people actually elected Members of Parliament to do - they ran on cutting the public health system. And it's still here, and still working better than the private system in the States.

Share it so that people can get into this conversation, 'cause we're not the only ones who think like this.

I'd point out the flaw in "single-Payer" in america as is , is that unless single payer is the ONLY option, they dont have the power necessary to bargain down rates effectively.

Something related to this discussion specicifically insurance and the cost of medical care. A doctor forget which state. (need to find article). Said he is no longer accepting any insurance and he set out rates as he needed to keep in business. The rates were incredibly reasonable for a very wide range of services.

The Gist was the doctor set his prices as he needed. He stated the insurance companies were chiefly responsible for driving up costs due to the whole middle man approach.

Here we go. Portland Maine

His webpage with his prices

part of the problem I also hospitals being turned into profit mills rather then health care centers.

edited 20th Jun '13 9:06:23 PM by TuefelHundenIV

Who watches the watchmen?

Single-payer with private competition does work, as shown in provinces in Canada with provincial car insurance basically totally destroying the private market within months of it rolling out due to the cheaper premiums. Remember that insurance is more expensive in private hands because they have to turn a profit and have overhead in trying to you to buy it so all things being equal, state-run insurance will always be cheaper no matter what.

Now, as for where the money in the US is going, I would agree with the OP in only thing: it's not quite so simple. There's no single factor that is lifting the cost of US healthcare to such epic levels in comparison to others.

The easiest comparison is between the United States and Canada because the vast similarities in culture and needs.

• Professional liability insurance in USA is 10x the cost compared to Canada
• Tort lawsuits in Canada are mainly handled by judge-only trials whereas in the United States they are typically jury-run trials. The payouts are indeed orders of magnitude higher in the USA
• Advertising costs lifts the cost of healthcare by, I think, something on the order of 12-15% but someone can probably get better statistics than me
• Bureaucratic costs lifts healthcare costs by I think another 15% if not more but again, someone can get a better number
• US R&D spending outstrips Canada by a longshot but whether that gets you much new technology has been questionable (versus getting you to buy lots of expensive random things that aren't worth it)
• US share of specialist versus general doctors is something like 70/30 or 80/20 (the last time I looked was for data from a decade ago, so I don't want to be too exact about it), while Canada is more around 50/50... obviously specialist cost a lot more
• US salaries for medical staff is estimated to be about 2x that of Canadian medical staff
• It's believed that bulk purchasing of drugs in Canada results in around 5-8% decrease in overall costs for equal products... however since Canada has embarked on buying generics, the costs of drugs can be 90% lower in Canada than the United States which is typically required to buy patented high-price drugs by law (I'm not sure the overall effect on healthcare costs, but probably something like increasing US healthcare costs by 5-7%)
• Lack of preventative medicine due to lack of insurance or lack of good insurance leads to a higher rate of acute problems in the United States versus Canada and those costs orders of magnitude higher to resolve than if they'd simply received cheap free healthcare in the first place, unknown cost increase in the USA

So those are what I remember from a study conducted by the United States government. At that time, US healthcare costs were about 20-30% higher than Canada. Now, US healthcare costs are around 100% higher.

Also let me just say that the US health insurance prices are insane. It costs $7000 for Kaiser Permante HMO or $8000 for Blue Cross PPO and that healthcare is piece of crap versus an Ontario Health Insurance Plan plus work benefits. If you make 60k/year in Ontario, you pay a $800 health premium tax. What do I mean by piece of crap? Co-pays. Medical in-network. Max limit on healthcare costs. Deductible. Limited coverage of health issues.

edited 20th Jun '13 10:06:45 PM by breadloaf

• Counter critism, including Canadian pols coming to the US to get care.

• The Ugly Truth About Canadian Health Care, City-Journal.org.

The US will never, ever have "government pays for everything and you get great care" single payer.

• Tricare, "single payer" and yet the costs aren't going down...

edited 21st Jun '13 6:54:56 AM by TairaMai

All night at the computer, cuz people ain't that great. I keep to myself so I won't be on The First 48

Single Payer isnt a viable option here in the states, because people know and believe they understand the private system (better the devil you know). There are ways to reform the gov't-insurance-provider relationship so that it would work more in favor of the patient and start bringing costs down.

Preventative care, more R&D, a better working relation between the Feds and the States and private insurance.

In Skunk Works, Lockheed designer related that when they built the Tri-Star for United Airlines, UA sent a total of 3-5 inspectors who verified that the airplanes were good to go. When the F-117 was being built, the USAF sent over 100 inspectors.

What were they doing? Filling out forms that their bosses sometimes didn't even read. One inspector (an Air Force Civilian) said "I don't care if you turn out scrap, as long as your forms are correct."

That "check the box" type thinking infests US health care. Forms are filled out, people go through the motions.

All night at the computer, cuz people ain't that great. I keep to myself so I won't be on The First 48

Did you actually read that? Most of the points they make are the opposite of the criticism you're trying to make.

The vast majority of them just happen to already be in the area for unrelated reasons, and a good chunk of the rest do it to avoid local drama, which has nothing to do with the system. Most of the medical tourism you're trying to imply (i.e., not the kind done by actual tourists) is done by people who are already wealthy enough to travel and pay higher costs to a foreign country — usually for a) a more specialized operation or b) because they didn't want to wait for their poor people to go first so they came here to get eagerly rushed ahead of ours by throwing money around.

I mean, one of the most common statements on American healthcare is that it's some of the best in the world...if you happen to be insanely rich.

Your second article paints a picture I...really didn't see on my occasional visits to Canada. Ever. Nor have heard from any of my Canadian friends. Ever. In the best case*

, what that author describes is a very local issue with inadequate care for the elderly in the immediate area, creating a disproportionate strain on the local ER. In the worst case, it's a shitload of people who, in the US, wouldn't be able to afford going to a hospital at all and would just die, so it's still better than we could manage.

As for Tricare, its issues are primarily the same as the military itself — while the whole thing is tax-funded, half of it gets dumped into all these middlemen and contractors along the way instead of actually being used to do what it's supposed to.

edited 21st Jun '13 1:40:27 PM by Pykrete

And that's how we do it in 'Merica!!1!. All kidding aside, we can't and won't do single payer because our government just isn't equipped to run healthcare. Before Tricare (and like New Mexico, before the new Medicaid), the government ran that health care system as "single payer". Costs kept going up and so contractors and HMO's were selected. And now costs continue to rise, but the health care employees have new hats.

Under the ACA, you must buy insurance on the health care exchanges if your job doesn't give you a plan.

edited 21st Jun '13 1:37:45 PM by TairaMai

All night at the computer, cuz people ain't that great. I keep to myself so I won't be on The First 48

So, when the US gov't ran "single payer" (why quotes?) health care, costs went up. Now that it's privately run...costs keep going up.

How is that an argument for or against anything?

Also, ACA is a giveaway for big insurance (which they still fought, because they might lose out on 0.5% short term profits *sigh*), but that's another issue altogether.

The state of health care in America is abysmal. I personally know people who get their antibiotics in the aquarium section of pet stores, have had to set their own broken bones, and have gone to sympathetic vets to get the cheaper animal versions of their prescription medications because they couldn't afford the human ones. My roommates uncle died of an abcessed tooth that he couldn't afford to have looked at until it spread to his brain and became untreatable. This sort of thing is outrageous. A first world country shouldn't have third world health care. In fact, I'd argue that our health care is actually worse in some respects than the third world; in most countries, you can get pretty much any prescription medications OTC and pay for your doctors appointment in barter, two things that you definitely can't do here.

A lot of the poorer people in my community have scheduled trips to the so called "third-world" countries for surgery because they couldn't afford it here. They still had to pay out the ass for it, but it was still cheaper than paying half a million dollars for the same procedure.

It sounds an awful lot like American health-care has a problem with price fixing. It doesn't sound like there's much actual competition.

Not Three Laws compliant.

Thank God for MIT.

This isn't even exclusively useful to third-world countries. While a lot of it is stopgap measures when you don't have X resource, about half of it is just a cheap but effective thing that would otherwise cost you thousands. Microfluidic kits that otherwise cost half a million can be cobbled together using this stuff for $150.

edited 22nd Jun '13 11:58:45 AM by Pykrete

Costs keep going up because of admin costs, paperwork, people not being fit, the use of ER as the family doctor, there are oodles and oodles of gremlins pushing the price upward.

Having the one or hundreds of payors will not help the payees. TRICARE is run by HMO's and yet pundits and the DOD bemoan the cost of military healthcare.

Part of the problem had to do with health admins chasing the next big thing. In one state, there was a large city with three hospitals. One was the country hospital, the other boasted of it's "five star" accommodations, the third had a laser for doing heart surgery. The "five star" hospital was running in the red, the laserz hospital could do a nifty trick carving the doc's initials in a business card but the laser wasn't anymore effective than regular surgery. Oh and the city had the population to support one hospital, the other two had lots of empty beds. This was The '90s, but the problem does exist (the 3 hospitals were in North Carolina IFAIK).

Like the rat-bitten children in Atlanta , bad decisions and a mypotic focus on the bottom line has hurt healthcare. The other problem is just inefficiency.

While people tend to cast healthcare execs and Scrooge Mc Duck, we forget that preventive measures and consumers also to blame. Many drugs exist that are really expensive substitutes for diet and exercise (i.e. weight loss pills, various "fad" drugs). I've seen drug sales reps openly admit that their drugs work best with "talk therapy". But at the same time they would provide free samples for us because we were a non-profit. HMO's, love'em or hate'em they do sometimes get results. Costs in NM would be worse if they didn't crack down on billing. Seriously, docs and shrinks would bill two hours for a 30 min visit. It happens more often that people want to talk about.

I don't get the appeal for "single payer". If anything, Uncle Sam would turn it over to the HMO's (a la TRICARE) and big pharama would still be big.

Kudos to MIT for making something cheaper. If you wanna fix US health care:

• More competitions to develop tech and procedures at lower cost. We need more of this and less "laser surgery"

• pushing preventive care and "case management", the one success story is NM's probation, parole and mental health (they dovetail in ways that may or may not surprise you). Yeah, it's not the lazy "call center" approach, but human contact can help people with chronic conditions. Just like more PO's and doing follow-ups is cheaper than putting people in prison over and over again.

• Sunshine laws for health administration and billing. Open the books and we could see where the money is going and eliminate double billing and fraud.

• Give ICE and the HHS a kick in the ass so they can accredit health care workers from other countries. Get DHS involved so that other countries don't send us their jihadists. Make this a two way exchange: we send PHD's and docs, they send us theirs.

• I'm of two minds regarding the "satellite" hospital system (where small town hospitals send cases to the big cities): on one hend this can shortchange small towns, on the other hand many small towns can avoid 3 hospitals where only one will do. Not a perfect solution but perfect is the enemy of good enough.

edited 22nd Jun '13 12:30:23 PM by TairaMai

All night at the computer, cuz people ain't that great. I keep to myself so I won't be on The First 48

I'm glad that my list of the actual problems was replaced by an emotional discussion of anecdotal case studies.

NM wasn't just an anecdote, at one point my home state was the model for the US healthcare system. I don't 100% like the satellite hospital model, but I don't hate it either. It does avoid having the small town hospital be a profit mill, but it can see patients shipped off to a far away for profit hospital.

Yeah, some hospitals have been turned into profit mills in a misguided attempt to wring blood from a stone. But the bottom line is always a focus. A colonel got caught lowballing PTSD diagnoses at Fort Lewis. Why? He though he was "saving" the US Army money. It's Inherent in the System: health care execs, docs, they need to watch the bottom line no matter who they work for.

edited 23rd Jun '13 11:46:01 AM by TairaMai

All night at the computer, cuz people ain't that great. I keep to myself so I won't be on The First 48