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Too Expensive, But Why?

Gamenets

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When you ask someone on the street "What is the problem with out healthcare system?" You are likely to get a responses depending on the person's socioeconomic status and there current level of healthcare need but one thing is for certain that you will many people saying "its too expensive." So in this thread i want to have a discussion on what the real problem is and what solution if any are available. Lastly guys go easy on me this is my first post on this site.

So here are my two cents.

Problem: Scarcity

First of all i think if we apply the laws of supply and demand on healthcare we can see that there is a massive shortage of supply in healthcare and this is where I'm willing to attack Obamacare because of its lack of incentives and programs to increase the supply of healthcare. Obamacare increase the amount of people who have access to healthcare without increasing the amount of supply of healthcare. According to Association of American Medical Colleges by 2020 there will be a scarcity of 90,000 doctors and by 2025 up to 130,000. This will surely increase the prices of healthcare and increase the waiting time for patients in need of healthcare. In Massachusetts where healthcare reform already took place under Mitt Romney increase waiting time to 48 days for new patients seeking a family doctor.

Can you think of any solutions???
 

Mr X

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When you ask someone on the street "What is the problem with out healthcare system?" You are likely to get a responses depending on the person's socioeconomic status and there current level of healthcare need but one thing is for certain that you will many people saying "its too expensive." So in this thread i want to have a discussion on what the real problem is and what solution if any are available. Lastly guys go easy on me this is my first post on this site.

So here are my two cents.

Problem: Scarcity

First of all i think if we apply the laws of supply and demand on healthcare we can see that there is a massive shortage of supply in healthcare and this is where I'm willing to attack Obamacare because of its lack of incentives and programs to increase the supply of healthcare. Obamacare increase the amount of people who have access to healthcare without increasing the amount of supply of healthcare. According to Association of American Medical Colleges by 2020 there will be a scarcity of 90,000 doctors and by 2025 up to 130,000. This will surely increase the prices of healthcare and increase the waiting time for patients in need of healthcare. In Massachusetts where healthcare reform already took place under Mitt Romney increase waiting time to 48 days for new patients seeking a family doctor.

Can you think of any solutions???

The private US healthcare system is much more expensive than government run universal healthcare systems in other parts of the world.
The evidence seems to indicate that healthcare is more successful when run by the state.
 

Hard Truth

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Everyone in the USA has access to health care. The law requires hospitals to treat everyone who comes to the emergency room. One of the big problems is that poor people without insurance get much of their health care through emergency rooms after their medical problems become severe. That is the least cost efficient way to provide health care. There is a lot of potential savings that can be tapped if care is accessible before it becomes an emergency. Those savings can and should be used to provide better care for all.
 

AliHajiSheik

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There generally is not a direction association between the cost of any procedure and the cost patient sees, or even the value.
 

jamesrage

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When you ask someone on the street "What is the problem with out healthcare system?" You are likely to get a responses depending on the person's socioeconomic status and there current level of healthcare need but one thing is for certain that you will many people saying "its too expensive." So in this thread i want to have a discussion on what the real problem is and what solution if any are available. Lastly guys go easy on me this is my first post on this site.

So here are my two cents.

Problem: Scarcity

First of all i think if we apply the laws of supply and demand on healthcare we can see that there is a massive shortage of supply in healthcare and this is where I'm willing to attack Obamacare because of its lack of incentives and programs to increase the supply of healthcare. Obamacare increase the amount of people who have access to healthcare without increasing the amount of supply of healthcare. According to Association of American Medical Colleges by 2020 there will be a scarcity of 90,000 doctors and by 2025 up to 130,000. This will surely increase the prices of healthcare and increase the waiting time for patients in need of healthcare. In Massachusetts where healthcare reform already took place under Mitt Romney increase waiting time to 48 days for new patients seeking a family doctor.

Can you think of any solutions???

1.Ban the con requirements that are in 35 states. We do not have this requirement for any other business.Certificate of need requirements stifle competition and thus keep prices high.
https://en.wikipedia.org/wiki/Certificate_of_need

2.Seeing how the scum in office are trying to deliberately undermine the wages of lower income and some skilled Americans by legalizing 12-20 million illegals and bringing in an additional 10 million illegals with the worker visa program, then why not do the same thing doctors? I am sure there are some doctors in China, India,and other semi-developed countries that would love to be US citizens, we could import these people by the boat load and dramatically lower medical costs by flooding the labor market with doctors.

3.Find ways to lower the costs of medical school.One of the reasons medical care is so damn expensive is due to the cost of education. Medical grants to med students and maybe lowering the requirements for certain specialized medical fields if it isn't already done.
 

Lutherf

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The primary reason US healthcare is so expensive is overregulation. A significant secondary reason is underregulation of the legal system regarding tort law.

As soon as medicare was implemented in a way that paid healthcare providers directly instead of simply providing an offset to the beneficiaries direct healthcare costs it started a snowball effect. Comprehensive health care coverage with minimal deductibles became a standard and that standard was little by little written into most state laws covering the issuance of medical insurance. Insurance providers were required to cover more and more stuff under all policies which severely hampered their ability to bill based on actuarial projections of purchaser requested coverage. For example, a single male would not be able to purchase a policy which excluded coverage for gynecological exams and prenatal services.

Another effect was that with these comprehensive policies and near zero deductibles people began using the system more. If their kid had an earache they wouldn't just take him to the pediatrician who prescribed a simple antibiotic and sent him home. They would now take him to a specialist and order CAT scans and all kinds of other stuff. I mean, heck, why not if it's just going to "cost" another $20?

The other thing that started happening is that people started to go to court more often and for more stuff. After all, nobody really gets hurt if the only person that has to pay in a suit is the insurance company, right?

So, there are the two big problems. Now, how to fix them.

First, deregulate insurance and switch medicare to a voucher system. Allow people to purchase just what they need and want. If you want to institute a federal health care program for treatment of catastrophic or chronic life threatening disease then go for it. Otherwise people will have to pay for the services they want. Insurers will be able to provide a wider suite of plans thus lowering the cost to the purchaser and people actually shopping for plans and medical service providers will put further downward pressure on prices.

Second, initiate a separate judicial system for medical cases that uses medical professionals as an integral part of the jury and mediation system. It is unreasonable to have people who have no idea about diagnostic and treatment methods making determinations about liability. Both the medical professional and the patient deserve to be on an equal footing in these cases.

Third, provide tax incentives for medical device manufacturers, pharmacological manufacturers and medical researchers. These organizations should be allowed to operate tax free as long as they are providing valid services to the medical community. Tax benefits should also be extended to groups and individuals who provide indigent health care. Medical professionals should be allowed to work off student debt in community clinics.

Finally, make employer provided medical benefits taxable while raising the limits individuals can contribute to HSA's and make deductions for medical costs incurred by individuals deductible as an adjustment to income for everyone (subject to a given cap). This will free people from having to stay in a given job just because of the benefits they are getting and still allow them to get a comparable tax benefit to what they are getting now.
 

Hard Truth

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Reasons for high health care costs?

1. PROFITS-Reasonable profit for investors is fine. Excessive profit derived from exploiting desperately sick people willing to pay anything to stay alive is exploitation.
2. Expansion-even many so-called "non-profit" health care organizations are constantly expanding their empires.
3. Excessive executive salaries
4. Doctors doing work that others can do-This is one area where I see progress lately
5. Artificial limits on the quantity of doctors-Some of the routine practices of medical schools seem to be intended to limit the number of people who become doctors, rather than to simply insure that they are fully qualified (example-requiring residents to stay awake for several days at a time while working).
6. Sleazy billing practices-the patient rarely is able to provide informed consent in advance to all the costs of treatment. Many of the billed items, and their cost, are ridiculous.
 
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Mach

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Can you think of any solutions???
It's a hard question.
If the top treatment for a certain cancer is say, $200K with a 50% chance to increase lifespan by 5-10 years, I don't know. How do we put a value on that? Because we do have to put a value on that. We do put a value on that. Someone, somewhere, right before they had a fatal heart attack, was working some job being stressed out, to help pay for someone who was getting $200K cancer treatment who was going to die a few months later anyway. How can we possibly answer that in any clean way, except for allowing individuals the opportunity to care for themselves through the marketplace? And even that's not perfect.

The longer we prolong our life, the higher our health care costs and age care costs go too. So the more we spend on it, the more we pay. For an individual is it OK if Trump wants to spend $5M on his own healthcare? I think it is OK. Is it OK for someone who chose to live homeless (one was in the news recently), to demand we all pay for their $5M in health care? I would say certainly not. So where does that line get drawn?
 

Mach

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Reasons for high health care costs? .
Your list is clearly one-sided, why don't you take a reasoned approach to the issue instead of this clear partisan biased list of absurdity?
 

Hard Truth

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Your list is clearly one-sided, why don't you take a reasoned approach to the issue instead of this clear partisan biased list of absurdity?

Which of my points do you think is wrong? and why?

I criticized non-profits, for-profit businesses, doctors, executives, medical school and hospital practices and job classifications. That seems pretty broad and non-partisan to me.

I don't buy the many exaggerated claims being made to in an attempt to prevent consumers from having the right to use the courts to address problems with their health care. Is that why you are claiming I'm partisan?
 

gmf2126

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By far the largest consumer (and by consumer I mean who is actually paying the bills) is the government and they long ago installed a reimbursement system that was based on cost. It's hard to believe that no one realized that if you are paying providers based on their cost, you are creating a system that pretty much guarantees as big a cost increase annually as possible. (this should remind you of higher education costs as well where guess who foots the most of those bills?) There has been a recent attempt to move away from this cost+ model but the infrastructure is so screwed up that it's going to take a radical change. The $$result of this, in addition to ever rising costs that has just been generally accepted for some reason, is also that no one has any idea what the true cost of delivering the actual healthcare service is? It's buried beneath mountains allocated overhead costs and charges for what should be considered public services - things like an infectious disease unit or NICU. Services that no one could afford individually and instead of the gov't picking up that tab, they allocate that cost to what a Band-Aid in the ER costs - that's why if you ever see a "gross" bill, a simple ER visit is $5K. The items listed in the thread are all contributors but the problem can never be addressed until providers are forced to calculate a real "cost", absent the items that don't relate to the particular patient and delivery of care.
 

Mach

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Reasons for high health care costs?
Because it squarely puts the majority of the blame on the industries that are providing health care, in a private market. You do touch a little bit on government that protects private in non-profits (tax advantaged), and in quotas on doctors, licensing, etc. You're right that's not entirely partisan in tone, and I may have come off a little harsh on that.

What about the consumer? What about incentivizing health care by detaching consumers from price/value considerations? What about government requirements on testing, liability, FDA approval, that create massive costs in every system that touches "health"? What about people wanting to live forever? What about refusing to allow someone to die because they can't afford, literally, to pay for treatment, NO MATTER the cause (smoking, obesity, complete and total lack of work ethic, whatever)?

In the IC industry there is a sub-group that is medical IC's. Their margins are significantly higher than many of the other markets, yet some people still are outraged even at that. Why? Largely because the risk is proportionately higher. You have to have far more specialized education and knowledge, on top of having to hope and pray your millions or billions in investment actually yield, and then actually pass FDA, and then you don't discover some fatal side effect years later, etc. This costs a fortune because it costs a fortune to do, it's very bland, vanilla business.

Nearly every industry has similar "issues" like profit and terrible billing, etc. That healthcare is somehow disproportionately expensive compared to them, despite having fairly similar hurdles in that regards, seems difficult to back.
 

Hard Truth

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You raised some good issues worthy of discussion. I did not mention them because I am not as well informed about some of them as I am on the issues I mentioned.

Although there is probably plenty of room for better efficiency and transparency, I am glad that we have an FDA and other agencies protecting our safety and reducing fraud. I don't accept the notion that we can trust the private sector alone to protect the public interest and safety, so I'm especially pro-regulation in general when it comes to the practice of medicine.

As far as the consumer's role, I support the idea of incentivizing healthy lifestyles, as long as there are sufficient protections for privacy. The issue of when to stop providing treatment for people at the end of their lives is one that should be addressed by developing a consensus between all of the interested and informed parties, including the patient or their family. It should not be up the patient and their family alone or the insurance company (or other payer) alone.

The medical sector is unique in that it is often a serious life or death, or quality of life, issue for the patient and/or their family. That gives a lot of power to the service providers and insurance companies that needs to be balanced with appropriate regulation and ways for consumers to effectively address their issues.
 

MaggieD

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When you ask someone on the street "What is the problem with out healthcare system?" You are likely to get a responses depending on the person's socioeconomic status and there current level of healthcare need but one thing is for certain that you will many people saying "its too expensive." So in this thread i want to have a discussion on what the real problem is and what solution if any are available. Lastly guys go easy on me this is my first post on this site.

So here are my two cents.

Problem: Scarcity

First of all i think if we apply the laws of supply and demand on healthcare we can see that there is a massive shortage of supply in healthcare and this is where I'm willing to attack Obamacare because of its lack of incentives and programs to increase the supply of healthcare. Obamacare increase the amount of people who have access to healthcare without increasing the amount of supply of healthcare. According to Association of American Medical Colleges by 2020 there will be a scarcity of 90,000 doctors and by 2025 up to 130,000. This will surely increase the prices of healthcare and increase the waiting time for patients in need of healthcare. In Massachusetts where healthcare reform already took place under Mitt Romney increase waiting time to 48 days for new patients seeking a family doctor.

Can you think of any solutions???

One of the problems is most certainly end-of-life heroic care. I have seen it time and again in my own life and the lives of my friends and family. Instead of palliative care, doctors give hope where no hope exists. Instead of helping people come to the end of their lives with dignity, they go to the end traipsing to-and-fro to chemotherapy sessions, radiation sessions and doctor visits being told, "Hey, we aren't done fighting yet! There's still hope!"

When there is none.

Cha-ching cha-ching, let that cash register ring.

Until we are willing to accept that people die . . . that there are conditions for which there is no cure . . . we will continue to spend billions of dollars on the exact wrong thing. Until we are ready to ask our doctors the hard questions? We'll continue to get more of what we've got.

As always, it's follow the money.
 

ksu_aviator

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When you ask someone on the street "What is the problem with out healthcare system?" You are likely to get a responses depending on the person's socioeconomic status and there current level of healthcare need but one thing is for certain that you will many people saying "its too expensive." So in this thread i want to have a discussion on what the real problem is and what solution if any are available. Lastly guys go easy on me this is my first post on this site.

So here are my two cents.

Problem: Scarcity

First of all i think if we apply the laws of supply and demand on healthcare we can see that there is a massive shortage of supply in healthcare and this is where I'm willing to attack Obamacare because of its lack of incentives and programs to increase the supply of healthcare. Obamacare increase the amount of people who have access to healthcare without increasing the amount of supply of healthcare. According to Association of American Medical Colleges by 2020 there will be a scarcity of 90,000 doctors and by 2025 up to 130,000. This will surely increase the prices of healthcare and increase the waiting time for patients in need of healthcare. In Massachusetts where healthcare reform already took place under Mitt Romney increase waiting time to 48 days for new patients seeking a family doctor.

Can you think of any solutions???

Supply is indeed the primary concern, but the reasons for the lack of supply are pretty vast. They range from cost of education, to difficulty of certification, to poor public education, to Medicare/caid/SCHIP to poor insurance choices.

If we really wanted to lower the cost of health care, we first start with eliminating comprehensive health insurance. Replace it with major medical and tax free savings plans that roll over into retirement plans when they are over funded and allow employers to contribute up to 100% of the yearly ded to the savings plan. Then, offer scholarships to qualified students...with a catch. The catch is they agree to work at VA hospitals for a period of time for wages that are substandard. They don't have to get a loan, the government saves money on VA costs and the supply of medical professionals increases. Finally, tort reform...tort reform...tort reform. We can't have everyone and their brother filing a law suit every time their great uncle, twice removed dies. Not to say mistakes should preclude any form of litigation, but things have to be more simple.

Do all of that and the cost of health care will plummet.
 

Threegoofs

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There are several reasons for high cost.

1) Fee for service. Thats how most docs get paid (that will change with Obamacare). Do more, get paid more. Do more expensive stuff, get paid more money. Example: Cardiologists used to get a ton of money for each stent placed. Patients about eight years ago would get stents just by showing up next to the cath lab. Evidence for the effectiveness of stents went down, insurers paid much less, and now cardiologists arent making the money they used to. Diagnostic procedures used to bring them in a boatload of money, now the ACA forced diagnostic labs to go into hospital systems, thus cutting the number of tests down dramatically (with no loss of quality). The ACA will help fix this with ACOs.

2) Waste and inefficiency. Administrative costs are obnoxious, especially with having to deal with third party billing. All those people in the doctors office are not nurses.. a whole lot are there to deal with paperwork. That costs money. This doesnt seem to be going away anytime soon.
Inefficiency is rampant. Cant find the patients CT scan from last month? Get another! Wheres that CXR? Dont know, just do a second one, etc. The electronic medical records will go a long, long way to fix this stuff. Thats also part of the ACA (and stimulus).

3) Litigation. The fear of lawsuits leads to all kinds of overtesting. Its not a huge cost, but the additional hidden cost of defensive medicine is real and out there. Fixing this issue by tort reform doesnt seem to work that great though. Texas has significant tort restrictions, but doesnt seem to be cheaper for health care. Malpractice Reform in Texas: a Review | The Incidental Economist

4) The 'shortage of doctors' mentioned in the OP is not an issue. Keep in mind, the study was done by the people who are in the business of educating doctors. No surprise they find that they will need to expand in the future and get more money... But medical associations limiting the use of 'physician extenders', PAs, NPs , PharmDs, etc is having a role. The 'minute clinics' at pharmacies are a great example of how you can have relatively cheap health care for minor issues. Yes, the NP running it may occasionally miss something significant. But so do doctors. Generally, the earache your kid has is a simple ear ache. The cut on his leg is a cut on his leg, no need for an ER visit. The medical lobby has fought the expansion of stuff like this for years. That adds up to increased costs, and your physician waiting time to be long, because Mildred just needs to get her BP tested and medication dose adjusted.
 

Neomalthusian

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Good post threegoofs. There may be some other aspects too, but those are good points.
 

CanadaJohn

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I don't for a minute believe that health care is expensive because of the scarcity. I'd say a main part of the expense and also the scarcity is the overuse of the system for tests and services that are not needed or that provide no treatment or prevention benefits.

In Canada, our system is starting to eat upwards of 50% of our provincial government budget and more and more services and supports are being delisted from those funded by the government. The only people capable of getting all the supports and services they need are those who are wealthy and those who are on welfare - the massive middle is underserved and overcharged.
 

Boo Radley

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Everyone in the USA has access to health care. The law requires hospitals to treat everyone who comes to the emergency room. One of the big problems is that poor people without insurance get much of their health care through emergency rooms after their medical problems become severe. That is the least cost efficient way to provide health care. There is a lot of potential savings that can be tapped if care is accessible before it becomes an emergency. Those savings can and should be used to provide better care for all.

Actually, they only have to take real emergencies by law.
 
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