Why Healthcare Costs so much according to Washington Post

[JasonM]

http://www.washingtonpost.com/blogs/ezra-klein/post/why-american-health-care-costs-so-much-in-one-very-long-graphic/2011/05/09/AFjSRVbG_blog.html

Gives a list of myths and "truths" backed up by graphs. What do u guys think? Truth or spin? Please cite your sources so we can all learn more.

[fisharmor]

"The US Government is less involved in price regulation, so Americans have less power over health care costs."
How does this follow? The US Government being involved in price regulation can only decrease the power we have over costs.

"Florida billed $310M in physical and speech therapy, a majority of which is fraudulent."
According to whom? Try watching your 3 1/2 year old daughter refusing to talk or eat with utensils, and then tell me its fraudulent. Assholes.

"Hospitals provide incentive for quicker procedures because of huge profit margins, escalating unnecessary costs."
Another complete WTF statement. How does it make any economic sense to say that doing the exact same thing quicker makes it more expensive? How can they put this on paper with a straight face, without mentioning that maybe people don't like to stay in the hospital because it's a miserable stinky shithole where historically people only really went to die?

I do agree that doctors are overpaid - BECAUSE THEY BELONG TO A CARTEL SYSTEM, IDIOTS.
Of course, the answer is to regulate them.... :rolleyes:

[CaptUSA]

I can accept most of their myths except that the real cost of malpractice is not the lawsuits, but the insurance that medical professionals must pay.

Their "truths" are quite misleading.

Yes, providers charge more because they can, but it's not because the government is less involved. It's because whatever they charge, government will make sure insurance companies foot the bill. The free market would stop that escalation.

When talking about the administration costs, they don't explain that this administration is necessary to adhere to the laws.

The outpatient costs are actually in response to the other costs. If we had a higher percentage of in-patient procedures, the overall costs would be even higher!

Yes, our doctors are over-paid compared to other countries, but this is also misleading. They are paid more because someone else is paying them other than the patient. Then, they have to turn around and pay higher malpractice insurance rates, which means their net is actually quite a bit lower. Not to mention the student loans they are all paying off. this is why we have an influx of foreign doctors. The profession is not as lucrative as it once was.

[IDefendThePlatform]

Horrible list. Actual top reasons:


1) Professional licensure. Decreased competition and increased barriers to entry => increased fees
2) Tax incentives for insurance to pay for medical procedures rather than individuals. Obscures the real cost to the individual and destroys market signals of individuals making decisions with their own money.
3) Medicare/Medicaid - When something's "free", people overuse it. A lot.

Other reasons as well but I don't have the motivation to continue...

[Acala]

Horrible list. Actual top reasons:


1) Professional licensure. Decreased competition and increased barriers to entry => increased fees
2) Tax incentives for insurance to pay for medical procedures rather than individuals. Obscures the real cost to the individual and destroys market signals of individuals making decisions with their own money.
3) Medicare/Medicaid - When something's "free", people overuse it. A lot.

Other reasons as well but I don't have the motivation to continue...

Yup.

It is simple. Prices go up when supply is impaired or demand is stimulated. Government intervention impairs supply with expensive licensing, permiting, and entrance barriers at virtually every point of service and production in the medical field. On the other hand, government gooses demand with direct subsidy (government programs like medicare) and indirect subsidy (tax incentives and regulatory demands for insurance coverage).

Increasing demand and inhibiting supply causes prices increases. Rampant fraud and bad tort law contribute, but the core of the problem is econ 101 - supply and demand.

[gunnysmith]

When starting a family in the 60's my hourly wages were $1.75/ hour $3500.00 annual income
Pre-natal care was $100.00 for those months prior to birth including delivery.
Total hospital costs for delivery including the 3 day stay was $300.00
Post delivery care by a pediatrician was $4.00 per visit. all the above out of pocket expenses Insurance was not the norm.
Some one with recent experience needs to compare those prices with todays costs based on average income.

[RabbitMan]

So I've seen all these reasons here why socialized medicine is a raw deal to the consumer that escalates pricing and lowers quality. So why do other developed countries with socialized medicine beat us year after year in health ratings, with lower per patient costs and 'free' medicine and surgery?

[The Free Hornet]

So I've seen all these reasons here why socialized medicine is a raw deal to the consumer that escalates pricing and lowers quality. So why do other developed countries with socialized medicine beat us year after year in health ratings, with lower per patient costs and 'free' medicine and surgery?

"beat us"? How? If you need specialized surgery now, is it any comfort to what age the average survivng baby lives to in your country?

You know nothing is free which is why I suspect you put it in quotes. Regarding costs, these too are relative and lose relevance as the context changes. Thanks to the government, we have been doing the wrong thing for decades. Medicare, medicaid, mandated emergency care (including visitors to US), licensing, and employer-paid care all mean that not only do we have a system with no brakes, we have actually slammed on the accelerator.

Almost any system, based on costs, is going to look better by comparison because it would take a GDP like ours to have it effed up so much. Also, the US and the people are opposed to rationed care and long wait times. This is good but if the regulations are neither removed nor fixed, increased rationing is the only outcome.

I wouldn't say 'who beat who' without knowing some specifics.

And if it isn't clear, our system is socialized already. Just because we argue over the bill, doesn't make it otherwise.

[fisharmor]

Let's start with surgery and "Dr "Ferdinand Demara, a "Lieutenant Commander" on a Canadian warship operating off the Korean coast during the so-called "Korean War.'

Dr. Demara found himself facing an emergency appendectomy in the medical office of a small ship in heavy weather, a tough job for a real doctor (and he was far from that), calling on all the sea legs that a naval officer had developed at sea. But Demara was neither a sailor nor a medical man, only a cheeky imposter who had done stints as an airline pilot, a railroad engineer, and a Catholic priest in his interesting career.

And yet, laboring under these handicaps, he was able to successfully conclude the operation all alone (he didn't dare call for assistance), save a grateful man's life, and receive the highest honor the Canadian navy can bestow -an unfortunate conclusion to this wonderful story since the doctor Demara was pretending to be saw the press coverage and screamed.

The crime and punishment part of this story holds no interest for me so let me cut to the chase: All Demara needed to perform this tricky surgery was an illustrated textbook of how to perform the operation (which he found in the medical office library), some strong nerves (every imposter's stock in trade) and an ability to read, interpret photographs, and follow clear instructions. Anyone with those gifts can perform much surgery (not all, but much) by the numbers. Were we to unbundle much of the medical nonsense which guards the privileges of a dishonest profession, the standard of health aroundthe world would soar -as it has in Cuba -while the princely incomes which make stock advisory services a fixture in the life of doctors would plummet.

At present, every serious medical condition on earth can be treated overseas in what amounts to luxury surroundings for about one-third the American cost; state of the art dentistry is available inseveral places just across the US/Mexican border for a small fraction of American prices; and medicine of all sorts may be self-prescribed there for pennies on the dollar for what would bill at heart-breaking prices in the United States. Shouldn't our schoolchildren know these things in order to become "informed consumers"? But no school that taught them would remain open very long.

The Demara story sticks with me because something of the same sort happened to me in the 1980s in the year your mother graduated from MIT. We planned an expedition in her honor in the Mayan country: Palenque, Tikal, Copan, complete with volcanoes, fishing boats, orchid jungles, the works. But I ruined the trip by overplanning for contingencies; in a move to trick Fate I went down alone a month in advance hoping to drop off a wedding gift for your cousins Blake and Lauren who were being married ontop of the volcano Popocatepetl (after climbing it first), and then take myself through the stages one after another to see they worked smoothly, and I wouldn't bumble around like a jerk when the real moments came.

That dress rehearsal cost me my right hip. Soaring past Monterrey on the way to Popo, and after that San Christobal, I ran into a gravel truck head on at 70 miles per hour. Ay caramba!

I woke on the operating table of a charity hospital in Monterrey with my right hip being bolted together with three huge pins. And promptly fainted. When I woke again I was in a ward with roaches swarming everywhere and a sleeping policeman by the bedside - I was under arrest for "damaging the highway'. Next morning the doctor who operated, who wasn't a doctor at all but only a 23-year-old intern, was there when I awoke, with a big smile from ear to ear. He gave me a big hug and said with delight:

"Everyone said you would die! I had never done this operation before. But I had a German textbook with pictures of every step to take and here you are -you are alive!" So when I read about Demara I had good reason to know it was true.

John Taylor Gatto, Weapons of Mass Instruction, "A Letter to My Granddaughter About Dartmouth"

[The Free Hornet]

Please cite your sources so we can all learn more.

Since you ask, this is 33% of what you need to know:


The Trouble With Licensure (http://www.lewrockwell.com/archives/fm/08-90.html)

...
For centuries, professionals have sought to cartelize their occupations, that is, to limit competition. The stated reason is protecting consumers, but the real reason is financial.
...

[Liberty74]

Government involvement, waste and fraud, and the threat of malpractice leading to unnecessary procedures add about 50% to the cost of healthcare. Some accountant firm did the study but I can't remember which one.

[The Free Hornet]

Horrible list. Actual top reasons:


1) Professional licensure. Decreased competition and increased barriers to entry => increased fees
2) Tax incentives for insurance to pay for medical procedures rather than individuals. Obscures the real cost to the individual and destroys market signals of individuals making decisions with their own money.
3) Medicare/Medicaid - When something's "free", people overuse it. A lot.

Other reasons as well but I don't have the motivation to continue...

4) EMTALA: Emergency Medical Treatment and Active Labor Act (http://en.wikipedia.org/wiki/Emergency_Medical_Treatment_and_Active_Labor_Act) mandates hospitals provide emergency care. Naturally, we have fewer hospitals and it is harder to get emergency care now.

I heard of a recent case with an eye injury and a urban patient (with full insurance) bounced around in an ambulance for an hour since various hospitals could not admit him (too busy).

Imagine if EVERY restaurant had to feed you or transfer you to another restaurant that could feed you and they must do this regardless of your ability to pay. My guess: we would start to have far fewer restaurants especially where they are needed. The politician feels good because they force the restaurants to feed the poor despite price escalation and closing restaurants.

[IDefendThePlatform]

As long as we're breaking down horrible media articles that don't understand the problem, here's a pretty classic attack that tries to refute Dr. Paul directly (obviously a huge fail, but its good to know what the enemy is thinking):

h xxp://www.huffingtonpost.com/2011/09/27/ron-paul-charity-republican-2012_n_983721.html

[Acala]

4) EMTALA: Emergency Medical Treatment and Active Labor Act (http://en.wikipedia.org/wiki/Emergency_Medical_Treatment_and_Active_Labor_Act) mandates hospitals provide emergency care. Naturally, we have fewer hospitals and it is harder to get emergency care now.

I heard of a recent case with an eye injury and a urban patient (with full insurance) bounced around in an ambulance for an hour since various hospitals could not admit him (too busy).

Imagine if EVERY restaurant had to feed you or transfer you to another restaurant that could feed you and they must do this regardless of your ability to pay. My guess: we would start to have far fewer restaurants especially where they are needed. The politician feels good because they force the restaurants to feed the poor despite price escalation and closing restaurants.

Keep in mind also that in most places in the USA you need government permission to open a hospital - which permission will be denied if the government determines that there would be too much competition with existing hospitals. There is nearly nothing left of the free market in health care.

[JasonM]

Since you ask, this is 33% of what you need to know:

Oooo, thanks for the link. It seems the medical cartel has more to do with high prices than one might think. I always suspected that part of the reason for high medical prices is because of the low number of doctors, and now I know how they keep the supply of doctors low!!

[Birdlady]

Another thing to consider is that more people are becoming sick with chronic illnesses who are bounced from doctor to doctor with no end in sight. I know TONS of young adults who are disabled or chronically ill, racking up the medical bills due to syndromes or conditions, that are incurable. Treatments are a joke too.

[tttppp]

Another thing to consider is that more people are becoming sick with chronic illnesses who are bounced from doctor to doctor with no end in sight. I know TONS of young adults who are disabled or chronically ill, racking up the medical bills due to syndromes or conditions, that are incurable. Treatments are a joke too.

You beat me to it. I completely agree. The biggest problem with our health industry is we focus on TREATING chronic illnesses with pills instead of focusing on CURES. Patients get bounced around from doctor to doctor, from pill to pill, but never get any cures.

One thing that does cure chronic diseases is chinese traditional medicine (acupuncture and herbs). If the U.S. focused on curing chronic illnesses with chinese traditional medicine, the total costs of health care would go down dramatically, and the standard of living would go up for anyone who initially had a disease.