Author Topic: I wonder why healthcare is so expensive in the US?  (Read 5151 times)

effigy98

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I wonder why healthcare is so expensive in the US?
« on: June 29, 2018, 05:39:15 PM »
I mean if this is not another warning sign that something bad is about to hit our economy, I don't know what is... When greed gets this out of a line, we usually crash.

Summary:
More than 80% of doctors who filed Medicare claims in 2016 for H.P. Acthar Gel -- a drug best known for treating a rare infant seizure disorder -- received money or other perks from the drugmakers. Medicare paid nearly $2 billion over five years.

In 2001, Questcor Pharmaceuticals paid a mere $100,000 for the rights to the drug.

The company first raised the price from $40 to $750 a vial shortly after acquiring it. The price doubled over the next few years. Then, on August 27, 2007, the price shot up overnight from $1,600 to $23,000 a vial.

Why would Medicare pay nearly $2 billion over five years when there was a far cheaper alternative? You can thank lawmakers for that: Medicare is not allowed to negotiate drug prices or tell doctors what drugs to prescribe. "Our Congress has told the Medicare program, you cannot control drug prices," says Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota. He directs the College of Pharmacy's PRIME Institute, which studies economic and policy issues related to pharmaceuticals. "We don't have any government process for evaluating, regulating and managing drug prices."

http://www.wowt.com/content/news/Medicare-spent-2-billion-for-one-drug-as-the-manufacturer-paid-doctors-millions-486962401.html

There is a very interesting NetFlix show on that covers this called Dirty Money, #3 Drug Short... A company called Valeant started doing this and wallstreet LOVED it, so many other drug makers started doing this (still to this day) and it is perfectly legal to do so.

OtherJen

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Re: I wonder why healthcare is so expensive in the US?
« Reply #1 on: June 29, 2018, 06:24:33 PM »
Itís not just the drug companies. I had a diagnostic colonoscopy in February (all clear!) and as I have a high-deductible health plan, I received bills from 1) the gastroenterologist who actually performed the procedure ($800), 2) the outpatient surgical center where it was performed ($650), 3) the anesthesiologist ($150), and 4) the nurse anesthetist ($150). The bills came from four different business entities, one of which was out of state.

To me, that is insane. And none of this info was made available before the test.

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #2 on: June 29, 2018, 06:34:04 PM »

The drug price increase is a lot worse than receiving a few separate bills for a colonoscopy, though.

OtherJen

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Re: I wonder why healthcare is so expensive in the US?
« Reply #3 on: June 29, 2018, 06:39:03 PM »

The drug price increase is a lot worse than receiving a few separate bills for a colonoscopy, though.

I donít think I stated otherwise. I gave a perspective that it isnít only the drug companies. Iím in a position to afford a $1700 routine procedure. Someone else may not be. I think itís ridiculous that it costs so much. AND I think itís insane that the list price for my good friendís cancer meds is $13,000 per month. One can care about multiple things at once.

v8rx7guy

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Re: I wonder why healthcare is so expensive in the US?
« Reply #4 on: June 29, 2018, 06:40:09 PM »
We paid $2,200 for an ER visit that considered off two stitches in my son's finger and a few xray's after he was bitten by a rabbit.  So bad.

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #5 on: June 29, 2018, 06:49:39 PM »

The drug price increase is a lot worse than receiving a few separate bills for a colonoscopy, though.

I donít think I stated otherwise. I gave a perspective that it isnít only the drug companies. Iím in a position to afford a $1700 routine procedure. Someone else may not be. I think itís ridiculous that it costs so much. AND I think itís insane that the list price for my good friendís cancer meds is $13,000 per month. One can care about multiple things at once.

Yes, the cancer meds goes back to the drug pricing discussion.  That's crazy.

I also had a diagnostic colonoscopy 9 years ago that came back clear.  The amount billed to the insurance company way back then was in the ballpark of the figures you gave, so it didn't look like there was a dramatic price increase in cost compared to those drugs mentioned by the OP.  However, I had to pay $300 out of pocket, which I wasn't happy out.  Another difference is that many of these healthcare providers are just scraping by.  They would actually lose money if all they had were Medicaid and Medicare patients since those programs don't pay for the real cost of the healthcare services.

OtherJen

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Re: I wonder why healthcare is so expensive in the US?
« Reply #6 on: June 29, 2018, 07:07:53 PM »

The drug price increase is a lot worse than receiving a few separate bills for a colonoscopy, though.

I donít think I stated otherwise. I gave a perspective that it isnít only the drug companies. Iím in a position to afford a $1700 routine procedure. Someone else may not be. I think itís ridiculous that it costs so much. AND I think itís insane that the list price for my good friendís cancer meds is $13,000 per month. One can care about multiple things at once.

Yes, the cancer meds goes back to the drug pricing discussion.  That's crazy.

I also had a diagnostic colonoscopy 9 years ago that came back clear.  The amount billed to the insurance company way back then was in the ballpark of the figures you gave, so it didn't look like there was a dramatic price increase in cost compared to those drugs mentioned by the OP.  However, I had to pay $300 out of pocket, which I wasn't happy out.  Another difference is that many of these healthcare providers are just scraping by.  They would actually lose money if all they had were Medicaid and Medicare patients since those programs don't pay for the real cost of the healthcare services.

Ah. Mine was $1700 out of pocket on my end (after what the insurance wrote off). I must not have made that clear.

Michael in ABQ

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Re: I wonder why healthcare is so expensive in the US?
« Reply #7 on: June 29, 2018, 07:24:49 PM »
It mostly boils down to a system built out on third-party payments. Pricing is incredibly opaque and convoluted because most medical bills go through insurance or to the government. The end consumer has few or no price signals to navigate the market and limited choices. If Doctor A offered appointments at $50 each and had similar ratings to Doctor B who charged $100 for the same service, Doctor A would soon have more business than they could handle. Instead, we have no idea what the price will be beforehand in most cases and hope that our insurance will cover it.

pecunia

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Re: I wonder why healthcare is so expensive in the US?
« Reply #8 on: June 29, 2018, 07:50:08 PM »
Mike in ABC:
Quote
Pricing is incredibly opaque and convoluted because most medical bills go through insurance or to the government.

There's people out there that have this glassy eyed look wear T shirts showing their love for the free market and drool when they talk about "market forces."  Medicine gets pretty complicated quickly.  A true free market allows choice.  It allows comparison shopping.  Even if the folks in the front rooms of the clinics knew the prices of your treatment, would you be able to comparison shop?  It's akin to a gnat trying to steer an elephant.

The only way to get those prices down is to have Uncle Sam himself negotiate with the medical industry to force prices down.  There's an obvious precedent for this action as other countries are able to do it.

doggyfizzle

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Re: I wonder why healthcare is so expensive in the US?
« Reply #9 on: June 29, 2018, 08:07:28 PM »
According to the AHRQ, healthcare is expensive because a small population (20-25%) of all medical cases requires extraordinary care, either at birth or for chronic conditions in later years.  Pharma companies are allowed long periods of patent exclusivity for medicines that in many cases were developed from NIH-funded studies and are administered to elderly patients covered by Medicare insurance that is Congressionally-limited from negotiating drug prices.  Hospitals also tend to charge exorbitant rates for many procedures to cover malpractice costs, ensure profitability (in some cases extreme), and budget for losses due to uninsured people using emergency rooms.  Itís a clusterf*ck.

Michael in ABQ

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Re: I wonder why healthcare is so expensive in the US?
« Reply #10 on: June 29, 2018, 10:08:42 PM »
Mike in ABC:
Quote
Pricing is incredibly opaque and convoluted because most medical bills go through insurance or to the government.

There's people out there that have this glassy eyed look wear T shirts showing their love for the free market and drool when they talk about "market forces."  Medicine gets pretty complicated quickly.  A true free market allows choice.  It allows comparison shopping.  Even if the folks in the front rooms of the clinics knew the prices of your treatment, would you be able to comparison shop?  It's akin to a gnat trying to steer an elephant.

The only way to get those prices down is to have Uncle Sam himself negotiate with the medical industry to force prices down.  There's an obvious precedent for this action as other countries are able to do it.

If you're having a heart attack the ambulance is going to take you to the nearest hospital and that will be that. If you need to get an MRI, or have an elective surgery, or choose a specialist there is typically time to comparison shop - if that were possible. Once again though, if your insurance company, whether private or government, is picking up the bill there's not really an incentive for consumers to find a better deal or for suppliers to offer one. If most people were paying direct for healthcare it would not fix all of the problems but I think it would certainly make some improvements. If nothing else it might stop hospitals from arbitrarily making up prices, and medical supply companies from getting away with exorbitant markups. i.e. a surgical screw that costs a $500 on an itemized hospital bill and is little different than something from a hardware store.

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #11 on: June 29, 2018, 10:21:16 PM »

The drug price increase is a lot worse than receiving a few separate bills for a colonoscopy, though.

I donít think I stated otherwise. I gave a perspective that it isnít only the drug companies. Iím in a position to afford a $1700 routine procedure. Someone else may not be. I think itís ridiculous that it costs so much. AND I think itís insane that the list price for my good friendís cancer meds is $13,000 per month. One can care about multiple things at once.

Yes, the cancer meds goes back to the drug pricing discussion.  That's crazy.

I also had a diagnostic colonoscopy 9 years ago that came back clear.  The amount billed to the insurance company way back then was in the ballpark of the figures you gave, so it didn't look like there was a dramatic price increase in cost compared to those drugs mentioned by the OP.  However, I had to pay $300 out of pocket, which I wasn't happy out.  Another difference is that many of these healthcare providers are just scraping by.  They would actually lose money if all they had were Medicaid and Medicare patients since those programs don't pay for the real cost of the healthcare services.

Ah. Mine was $1700 out of pocket on my end (after what the insurance wrote off). I must not have made that clear.

No you did.  You have a high deductible.  My plan only has a $100 deductible, but there was a co-pay for me.  I plan to have one more under my work plan before I FIRE since I'm not sure what it would cost me after I FIRE.

Fireball

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Re: I wonder why healthcare is so expensive in the US?
« Reply #12 on: June 29, 2018, 11:25:32 PM »
Healthcare is about the only subject that nearly every American can agree on. Everyone knows it sucks, but we don't see to have the will to fix it.

hops

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Re: I wonder why healthcare is so expensive in the US?
« Reply #13 on: June 30, 2018, 05:59:14 AM »
I've been on this drug for less than a year, and in that time the cost has gone up almost $400 per month:

https://www.nytimes.com/2018/01/06/business/humira-drug-prices.html

Over the last six years the price of it has increased 100%. The last couple people I mentioned this to shrugged it off with "But isn't there a copay assistance card?" That isn't the point.

Bucksandreds

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Re: I wonder why healthcare is so expensive in the US?
« Reply #14 on: June 30, 2018, 06:08:01 AM »
Healthcare is about the only subject that nearly every American can agree on. Everyone knows it sucks, but we don't see to have the will to fix it.

Vote democrat. Once they control all of government, as the rebuplicans do now, we may finally see the Ďpublic optioní that they were 1-2 votes away from last time. Once everyone signs up for that , ,which they will, the whole current system is destroyed.

pecunia

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Re: I wonder why healthcare is so expensive in the US?
« Reply #15 on: June 30, 2018, 07:20:15 AM »
Bucksandreds:
Quote
Vote democrat. Once they control all of government, as the rebuplicans do now, we may finally see the Ďpublic optioní that they were 1-2 votes away from last time. Once everyone signs up for that , ,which they will, the whole current system is destroyed.

The last 30 or so years have seen conservative forces seize total control of the GOP and the Democrats as well.  The Democrats will NOT do this for you.  They have had chances in the past.  The only way that change can be nudged along is via a very strong grass roots organization.

The power of big corporations is very strong in these times.  They control the media and so can easily sway public opinion.

BTDretire

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Re: I wonder why healthcare is so expensive in the US?
« Reply #16 on: June 30, 2018, 08:08:22 AM »
Itís not just the drug companies. I had a diagnostic colonoscopy in February (all clear!) and as I have a high-deductible health plan, I received bills from 1) the gastroenterologist who actually performed the procedure ($800), 2) the outpatient surgical center where it was performed ($650), 3) the anesthesiologist ($150), and 4) the nurse anesthetist ($150). The bills came from four different business entities, one of which was out of state.

To me, that is insane. And none of this info was made available before the test.

 It's been my experience that your insurance company would negotiate those prices down, ie. here's what we allow you to charge. I have a$10k deductible and have mostly been very pleased with the difference between what is chargeed and what I owe.

BTDretire

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Re: I wonder why healthcare is so expensive in the US?
« Reply #17 on: June 30, 2018, 08:11:47 AM »
We paid $2,200 for an ER visit that considered off two stitches in my son's finger and a few xray's after he was bitten by a rabbit.  So bad.

  Yes, they love to throw in an xray or two. I had a wood chip in my eye I couldn't get out, nervous doctor got
it out with a hypodermic needle and then insisted on an xray.

BTDretire

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Re: I wonder why healthcare is so expensive in the US?
« Reply #18 on: June 30, 2018, 08:19:02 AM »
I've been on this drug for less than a year, and in that time the cost has gone up almost $400 per month:

https://www.nytimes.com/2018/01/06/business/humira-drug-prices.html

Over the last six years the price of it has increased 100%. The last couple people I mentioned this to shrugged it off with "But isn't there a copay assistance card?" That isn't the point.
A friend just had his Crestor go from $90 to $900 every 3 months. This was some change that moved the drug from tier 2 to tier 3. He ended up going to the generic that came out in 2016, which is $10, but free to him on his insurance.

OtherJen

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Re: I wonder why healthcare is so expensive in the US?
« Reply #19 on: June 30, 2018, 08:35:13 AM »
Itís not just the drug companies. I had a diagnostic colonoscopy in February (all clear!) and as I have a high-deductible health plan, I received bills from 1) the gastroenterologist who actually performed the procedure ($800), 2) the outpatient surgical center where it was performed ($650), 3) the anesthesiologist ($150), and 4) the nurse anesthetist ($150). The bills came from four different business entities, one of which was out of state.

To me, that is insane. And none of this info was made available before the test.

 It's been my experience that your insurance company would negotiate those prices down, ie. here's what we allow you to charge. I have a$10k deductible and have mostly been very pleased with the difference between what is chargeed and what I owe.

These were my out of pocket costs AFTER the insurance negotiations. I don't have the statements in front of me, but I remember that the actual costs pre-negotiation were about $300 higher each for the anesthesiologist and nurse anesthetist.

BTDretire

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Re: I wonder why healthcare is so expensive in the US?
« Reply #20 on: June 30, 2018, 08:35:42 AM »
Bucksandreds:
Quote
Vote democrat. Once they control all of government, as the rebuplicans do now, we may finally see the Ďpublic optioní that they were 1-2 votes away from last time. Once everyone signs up for that , ,which they will, the whole current system is destroyed.

The last 30 or so years have seen conservative forces seize total control of the GOP and the Democrats as well.  The Democrats will NOT do this for you.  They have had chances in the past.  The only way that change can be nudged along is via a very strong grass roots organization.

The power of big corporations is very strong in these times.  They control the media and so can easily sway public opinion.

 Geez, didn't we just go through Government Obamacare where we were going to have $2500 decrease in health insurance cost and mine went from $4,300 a year to $11,200 a year for my family. And that is not Obamacare that's private BCBS. I guess some of you haven't heard about $700 hammers and $1,000 toilets to the goverment. And aren't all these drug increases happening under Obamacare? Also should hardworking taxpayers be subsidizing healthcare costs for people that have $1,000,000 of Net Worth? That's government regulation at work.
  Not that I wouldn't take advantage of it. Although stupidly, I have not, and it has cost me over $35k the last 5 years. My AGI is usually in the 30 thousands so I could have been heavily subsidized.
 

hops

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Re: I wonder why healthcare is so expensive in the US?
« Reply #21 on: June 30, 2018, 08:47:15 AM »
I've been on this drug for less than a year, and in that time the cost has gone up almost $400 per month:

https://www.nytimes.com/2018/01/06/business/humira-drug-prices.html

Over the last six years the price of it has increased 100%. The last couple people I mentioned this to shrugged it off with "But isn't there a copay assistance card?" That isn't the point.
A friend just had his Crestor go from $90 to $900 every 3 months. This was some change that moved the drug from tier 2 to tier 3. He ended up going to the generic that came out in 2016, which is $10, but free to him on his insurance.

Switcheroos like that are great when they work. For too many important prescriptions, there aren't necessarily cheaper alternatives.

BuildingFrugalHabits

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Re: I wonder why healthcare is so expensive in the US?
« Reply #22 on: June 30, 2018, 09:43:19 AM »
Geez, didn't we just go through Government Obamacare where we were going to have $2500 decrease in health insurance cost and mine went from $4,300 a year to $11,200 a year for my family. And that is not Obamacare that's private BCBS. I guess some of you haven't heard about $700 hammers and $1,000 toilets to the goverment. And aren't all these drug increases happening under Obamacare? Also should hardworking taxpayers be subsidizing healthcare costs for people that have $1,000,000 of Net Worth? That's government regulation at work.
  Not that I wouldn't take advantage of it. Although stupidly, I have not, and it has cost me over $35k the last 5 years. My AGI is usually in the 30 thousands so I could have been heavily subsidized.
 

Hardworking taxpayer here.  Yes we should subsidize healthcare for everyone and allow the government to negotiate prices on drugs and services.  Having a healthcare system that isn't tied to employment is much better for society overall. It promotes freedom and allows for more potential entrepreneurs to take risks.  I wouldn't get too hung up on net worth either.  ACA subsidies are based on income and a "million dollars" ain't what it used to be.  I wouldn't object to my in-laws receiving an ACA subsidy on their 40k a year pension. 

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #23 on: June 30, 2018, 09:54:48 AM »
Geez, didn't we just go through Government Obamacare where we were going to have $2500 decrease in health insurance cost and mine went from $4,300 a year to $11,200 a year for my family. And that is not Obamacare that's private BCBS. I guess some of you haven't heard about $700 hammers and $1,000 toilets to the goverment. And aren't all these drug increases happening under Obamacare?

You could say it happened despite Obamacare, but it would have happened anyway. 

Quote
Also should hardworking taxpayers be subsidizing healthcare costs for people that have $1,000,000 of Net Worth?

Absolutely.  Net worth is NOT income.  People should NOT be penalized for saving, and net worth includes your home to boot.  In fact, my stash investments alone are considerably more than that, but net worth boosts that number even higher since that includes my home.  I certainly plan to use the ACA premium tax credit when I FIRE, maybe CSR as well.  I didn't save over $1M to spend it on healthcare insurance!  Being a single person, I already paid higher taxes my entire working career, so this will be my chance to get a little bit back from the system.


Dave1442397

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Re: I wonder why healthcare is so expensive in the US?
« Reply #24 on: June 30, 2018, 09:55:58 AM »
Consumer Reports had an article in a recent issue on drug costs. They found that Costco offered the best prices for consumers in general. Various branches of CVS had wildly different prices for the same drug, even at stores in the same town.

Me, if I ever need a prescription on a regular basis, I'll be researching Canadian prices.

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #25 on: June 30, 2018, 10:00:20 AM »
Consumer Reports had an article in a recent issue on drug costs. They found that Costco offered the best prices for consumers in general. Various branches of CVS had wildly different prices for the same drug, even at stores in the same town.

Me, if I ever need a prescription on a regular basis, I'll be researching Canadian prices.

I saw a news story a while back that stated that if you are paying out of pocket instead of using insurance, you should ask a pharmacy if that is the best price you can get for a drug.  Otherwise, they may charge you a higher price than you could get otherwise.

RetiredAt63

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Re: I wonder why healthcare is so expensive in the US?
« Reply #26 on: June 30, 2018, 10:07:00 AM »
Americans need a Tommy Douglas.

Travis

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Re: I wonder why healthcare is so expensive in the US?
« Reply #27 on: June 30, 2018, 10:30:52 AM »
Bucksandreds:
Quote
Vote democrat. Once they control all of government, as the rebuplicans do now, we may finally see the Ďpublic optioní that they were 1-2 votes away from last time. Once everyone signs up for that , ,which they will, the whole current system is destroyed.

The last 30 or so years have seen conservative forces seize total control of the GOP and the Democrats as well.  The Democrats will NOT do this for you.  They have had chances in the past.  The only way that change can be nudged along is via a very strong grass roots organization.

The power of big corporations is very strong in these times.  They control the media and so can easily sway public opinion.

 Geez, didn't we just go through Government Obamacare where we were going to have $2500 decrease in health insurance cost and mine went from $4,300 a year to $11,200 a year for my family. And that is not Obamacare that's private BCBS. I guess some of you haven't heard about $700 hammers and $1,000 toilets to the goverment. And aren't all these drug increases happening under Obamacare? Also should hardworking taxpayers be subsidizing healthcare costs for people that have $1,000,000 of Net Worth? That's government regulation at work.
  Not that I wouldn't take advantage of it. Although stupidly, I have not, and it has cost me over $35k the last 5 years. My AGI is usually in the 30 thousands so I could have been heavily subsidized.
 

The ACA only attempted to solve half the problem.  In my opinion it tried to solve the wrong one.  It's a system to give everybody insurance, but does nothing to state how much what the insurance is covering should cost.  The drug increases being discussed aren't happening "under Obamacare."  That's not the purpose of the ACA.  Patent laws seem to be one of a few factors in drug prices.  A company can buy the rights to a drug and jack up the price 500% because the drug is needed and nobody else is providing it.  There's no law to say they can't, and I'm sure they're paying Congress handsomely for the privilege.

Just giving everyone insurance is similar to the Democrat solution to student loans - just give them to everybody no matter the cost.  Drug companies and hospitals (just like universities) are under no obligation or incentive to control costs if the government or the insurance companies are going to keep paying them.  Conversely, it appears that the ACA mandated certain things be covered, but then limited what the government would reimburse and resulted in either increased rates or simply bowing out of the market.  Instead of a national market for insurance, you have 50 vastly different ones.

I had an MRI a few months ago.  The bill was for $1500, but my insurance (TRICARE) only paid them $250.  I pay nothing out of pocket.  Was the cost of the MRI actually $1500, was the imaging center trying to high-ball the price, or was my government-funded insurance being stingy?  We have no way of knowing.  If a child, a middle age person, and an elderly person go into the hospital for exactly the same thing, you can guarantee they'll all get different bills.  The quality of insurance coverage also seems to be a factor in the bill as well. 

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #28 on: June 30, 2018, 10:46:37 AM »
I had an MRI a few months ago.  The bill was for $1500, but my insurance (TRICARE) only paid them $250.  I pay nothing out of pocket.  Was the cost of the MRI actually $1500, was the imaging center trying to high-ball the price, or was my government-funded insurance being stingy?

Healthcare facilities take a hit on insufficient payments such as from Medicare and Medicaid.  I've heard of hospitals having increased volume while losing money due to the increase in Medicare and Medicaid patients.  Someone else paying has to make up the difference.  Not everyone could get a Medicare rate if the facility is to survive.  They've already been known to start cutting different services.  Healthcare facilities should be compensated fairly.

BuildingFrugalHabits

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Re: I wonder why healthcare is so expensive in the US?
« Reply #29 on: June 30, 2018, 10:51:41 AM »
Agreed about the ACA not controlling costs.  We need better cost controls in the US by leveraging the bargaining power of a large provider or single provider.  Other countries don't pay anywhere close to what we do for routine procedures like MRIs etc.  For example a heart sonogram in Japan costs about $150 whereas in the US, it costs $1,000-8,000.  Their system allows providers to charge a premium for new, state of the art technology but then the costs must go down over time.  Since MRIs etc are 1980's technology it is now priced as a commodity in most countries.  We need to stop being suckers and allowing big business to control policy. 

Travis

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Re: I wonder why healthcare is so expensive in the US?
« Reply #30 on: June 30, 2018, 11:01:03 AM »
I had an MRI a few months ago.  The bill was for $1500, but my insurance (TRICARE) only paid them $250.  I pay nothing out of pocket.  Was the cost of the MRI actually $1500, was the imaging center trying to high-ball the price, or was my government-funded insurance being stingy?

Healthcare facilities take a hit on insufficient payments such as from Medicare and Medicaid.  I've heard of hospitals having increased volume while losing money due to the increase in Medicare and Medicaid patients.  Someone else paying has to make up the difference.  Not everyone could get a Medicare rate if the facility is to survive.  They've already been known to start cutting different services.  Healthcare facilities should be compensated fairly.

It seems like the system needs to meet somewhere in the middle.  The medical facility needs to present an honest assessment of their costs while government-provided insurance needs to compensate at a reasonable rate.  One can't work without the other. 

Seadog

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Re: I wonder why healthcare is so expensive in the US?
« Reply #31 on: June 30, 2018, 11:14:01 AM »
We paid $2,200 for an ER visit that considered off two stitches in my son's finger and a few xray's after he was bitten by a rabbit.  So bad.

Neat. I paid about $20 for a few stitches after I was all boozed up in Thailand and slashed my finger on a piece of beach glass. And this was at like 11:00 at night too. Lots of clinics everywhere to deal with drugged up tourists who think muddy island roads and poorly maintained motorbikes is the perfect way to learn how to ride.

The reason is simple. For the vast majority of people in the US, they are wholly disconnected from the true price of medicine, so there is really no incentive to keep prices low, because there are no checks. Just like I was a hell of a lot more liberal with my flight decisions when work is paying vs my own vacation. 

If anything most people frequenting high end medical services have a long term interest in these high prices, as they most likely own all sorts of these health and drug companies indirectly via retirement funds. Then you have a bit of a cartel effect too, as the numbers of doctors are regulated and if everyone else is charging this, why wouldn't you? Why were eyeglasses up until recently just "accepted" to cost $300 for what amounts to 50 cents of plastic remolded?

The only people who do see the real costs are people without insurance, and taken as a whole, they're pretty much the poorest strata of society, so no one gives a shit about them. In short, it's a very roundabout way of transferring money from the public to the top.

How much should a few stitches cost? What's a "fair" price? 10 minutes of time for someone at a nurse skill level, a bit of alcohol, and a bit of filament? For a procedure that can be literally done on a street corner? How is it a Thai clinic can make money doing the same procedure at literally 1% of the cost? It's because insurance is much rarer there, and no one would go if it cost what it did in the US. It's more of a true market since the people consuming the service actually feel the cost.

As soon as true costs borne by the consumer are disconnected from them, the price is free to run amok. Look at education or housing as other classic examples. While the cost is eventually borne by the consumer (via loans), is well deferred and structured into payments, so you don't feel the sting as sharply. As a consequence, you saw increases in tuition and housing that would never happen if people had to save and pay for things like they did before.

Getting slightly off topic, but I find it fascinating from a behavior economics point of view what happens. Homes, education, and health care are all important, but expensive, so various programs pop up to help out. (CHMC/US equivalent, student loan programs, health insurance) -> As these kick in, it becomes more accessible, demand increases, and prices rise -> Now, prices for everything has skyrocketed, everything is just as inaccessible as before, but home builders/early owners, universities, and insurance companies/hospitals are all making out like bandits.

But you wouldn't believe it listening to them. Because their non-mustachian ideals dictate that if home prices/tuition/premiums double every 5 years, then they need to spend this influx of cash on *anything* lest they show a budgetary surplus and get their piece of the pie cut next year.

....And this just carries on until it can't

pecunia

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Re: I wonder why healthcare is so expensive in the US?
« Reply #32 on: June 30, 2018, 11:44:14 AM »
Quote
Healthcare facilities take a hit on insufficient payments such as from Medicare and Medicaid.  I've heard of hospitals having increased volume while losing money due to the increase in Medicare and Medicaid patients.  Someone else paying has to make up the difference.

Just what is meant by insufficient?  Are they actually losing money or simply not generating the profit that some geezer in the back office wants them to get?  Factories have closed.  They have closed not that they were not profitable.  They have closed because the owners  could move the work elsewhere and make more money.  People who worked at those factories were out on the streets.

You can't believe almost anything from the bean-counters.  There is a special place in hell for them. 

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #33 on: June 30, 2018, 12:41:14 PM »
Quote
Healthcare facilities take a hit on insufficient payments such as from Medicare and Medicaid.  I've heard of hospitals having increased volume while losing money due to the increase in Medicare and Medicaid patients.  Someone else paying has to make up the difference.

Just what is meant by insufficient?  Are they actually losing money or simply not generating the profit that some geezer in the back office wants them to get?

Losing money.  We're talking about non-profit hospitals as well.  There's a lot of overhead in hospitals.   Earlier someone commented on what's involved with getting stitches in the ER.  The poster was over-simplifying a procedure and what all is involved behind the scenes.  It's a lot different than using a needle and thread in a back alley.

Exflyboy

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Re: I wonder why healthcare is so expensive in the US?
« Reply #34 on: June 30, 2018, 12:54:43 PM »
Well I'm looking for a suture kit and Lidocaine to keep in the fridge (assuming it doesn't cost $23,000 for a vial)

maizeman

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Re: I wonder why healthcare is so expensive in the US?
« Reply #35 on: June 30, 2018, 01:04:28 PM »
People should NOT be penalized for saving, and net worth includes your home to boot.  In fact, my stash investments alone are considerably more than that, but net worth boosts that number even higher since that includes my home.  I certainly plan to use the ACA premium tax credit when I FIRE, maybe CSR as well.  I didn't save over $1M to spend it on healthcare insurance!  Being a single person, I already paid higher taxes my entire working career, so this will be my chance to get a little bit back from the system.

Presumably this money you will be "getting back" from the system will come from the taxes paid by the children of those families that were paying lower taxes than you during your working life?

I say this as a single person without children myself. And while it is a little annoying that people receive dramatic tax cuts simply for marrying someone else, it certainly does make sense for us to incentivize people to have at least a few children. Right now birth rates are well below replacement in the USA and have been dropping rapidly* since the 2007/08 economic crash. While both our economy and our ecology could make do with somewhat fewer people than are alive today, trust me that neither you nor I want to live our more elderly years in a country where the population is falling too rapidly.

*Well rapid by demographic standards. In 2008 we were at 2.12 births per woman, we're now at 1.75 births per woman and continuing to fall. Given the current trendline (always a risky way to try to predict the future), we'll be looking at Italy level numbers in another 4-5 years.

BTDretire

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Re: I wonder why healthcare is so expensive in the US?
« Reply #36 on: June 30, 2018, 01:40:08 PM »
I had an MRI a few months ago.  The bill was for $1500, but my insurance (TRICARE) only paid them $250.  I pay nothing out of pocket.  Was the cost of the MRI actually $1500, was the imaging center trying to high-ball the price, or was my government-funded insurance being stingy?

Healthcare facilities take a hit on insufficient payments such as from Medicare and Medicaid.  I've heard of hospitals having increased volume while losing money due to the increase in Medicare and Medicaid patients.  Someone else paying has to make up the difference.  Not everyone could get a Medicare rate if the facility is to survive.  They've already been known to start cutting different services.  Healthcare facilities should be compensated fairly.
 
   A few years ago I had an MRI of my back, I told them I didn't have insurance and wanted the best price.
They said it would be $380, I said, OK let's set a date. They ask can you come back at 9pm.
 I had to wait a whole 8 hours for an MRI!!
 When I mentioned this to my doc, he said, ya, we have a glut of MRI machines in the area.
 I'll never know if the insurance company would have negotiated a better price.

BTDretire

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Re: I wonder why healthcare is so expensive in the US?
« Reply #37 on: June 30, 2018, 01:48:02 PM »
Geez, didn't we just go through Government Obamacare where we were going to have $2500 decrease in health insurance cost and mine went from $4,300 a year to $11,200 a year for my family. And that is not Obamacare that's private BCBS. I guess some of you haven't heard about $700 hammers and $1,000 toilets to the goverment. And aren't all these drug increases happening under Obamacare?

You could say it happened despite Obamacare, but it would have happened anyway. 

Quote
Also should hardworking taxpayers be subsidizing healthcare costs for people that have $1,000,000 of Net Worth?

Absolutely.  Net worth is NOT income.  People should NOT be penalized for saving, and net worth includes your home to boot.  In fact, my stash investments alone are considerably more than that, but net worth boosts that number even higher since that includes my home.  I certainly plan to use the ACA premium tax credit when I FIRE, maybe CSR as well.  I didn't save over $1M to spend it on healthcare insurance!  Being a single person, I already paid higher taxes my entire working career, so this will be my chance to get a little bit back from the system.
 
  Just to take the other side, so you have this very nice home as part of your net worth, and you also have a big stash.
But the kid just out of college living in a rental with a fair income should subsidize you.
  Just feeling contrary today. :-)


DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #38 on: June 30, 2018, 01:50:46 PM »
I had an MRI a few months ago.  The bill was for $1500, but my insurance (TRICARE) only paid them $250.  I pay nothing out of pocket.  Was the cost of the MRI actually $1500, was the imaging center trying to high-ball the price, or was my government-funded insurance being stingy?

Healthcare facilities take a hit on insufficient payments such as from Medicare and Medicaid.  I've heard of hospitals having increased volume while losing money due to the increase in Medicare and Medicaid patients.  Someone else paying has to make up the difference.  Not everyone could get a Medicare rate if the facility is to survive.  They've already been known to start cutting different services.  Healthcare facilities should be compensated fairly.
 
   A few years ago I had an MRI of my back, I told them I didn't have insurance and wanted the best price.
They said it would be $380, I said, OK let's set a date. They ask can you come back at 9pm.
 I had to wait a whole 8 hours for an MRI!!
 When I mentioned this to my doc, he said, ya, we have a glut of MRI machines in the area.
 I'll never know if the insurance company would have negotiated a better price.

It sounds like you got a better price.  The average MRI cost is $2611 (googled).  Maybe it was an older outdated MRI machine.

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #39 on: June 30, 2018, 01:54:05 PM »
Geez, didn't we just go through Government Obamacare where we were going to have $2500 decrease in health insurance cost and mine went from $4,300 a year to $11,200 a year for my family. And that is not Obamacare that's private BCBS. I guess some of you haven't heard about $700 hammers and $1,000 toilets to the goverment. And aren't all these drug increases happening under Obamacare?

You could say it happened despite Obamacare, but it would have happened anyway. 

Quote
Also should hardworking taxpayers be subsidizing healthcare costs for people that have $1,000,000 of Net Worth?

Absolutely.  Net worth is NOT income.  People should NOT be penalized for saving, and net worth includes your home to boot.  In fact, my stash investments alone are considerably more than that, but net worth boosts that number even higher since that includes my home.  I certainly plan to use the ACA premium tax credit when I FIRE, maybe CSR as well.  I didn't save over $1M to spend it on healthcare insurance!  Being a single person, I already paid higher taxes my entire working career, so this will be my chance to get a little bit back from the system.
 
  Just to take the other side, so you have this very nice home as part of your net worth, and you also have a big stash.
But the kid just out of college living in a rental with a fair income should subsidize you.
  Just feeling contrary today. :-)

Well, only after I FIRE, and if I can keep my MAGI low enough, which I should be able to do, and assuming the ACA doesn't change, and that's not a certainty, either.

skibum

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Re: I wonder why healthcare is so expensive in the US?
« Reply #40 on: June 30, 2018, 02:21:14 PM »
Not sure if anyone's seen this, but Vox.com has started to collect ER bills from across the US - https://erbills.vox.com/. For this Canadian, it's been an eye-opening read. The number of families with good insurance who still end up with significant bills for minor visits just blows my mind. I really don't understand why this isn't a bigger issue across the country.

Forget single payer, how hard could it be to legislate price transparency? If there are such things as insurance networks, why not legislate that any charge outside the network must be agreed to up front? How are hospitals within an insurance network allowed to even hire people who are not part of it?

PiobStache

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Re: I wonder why healthcare is so expensive in the US?
« Reply #41 on: June 30, 2018, 02:52:04 PM »
Americans need a Tommy Douglas.

Not if it leads to a Canadian style system.  The US is usually ranked about #37 in regards to healthcare compared to other countries.  Canada comes in at #30.  No thanks, please give me a system like France or Switzerland that comes in the top five on a consistent basis.

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #42 on: June 30, 2018, 02:58:18 PM »
People should NOT be penalized for saving, and net worth includes your home to boot.  In fact, my stash investments alone are considerably more than that, but net worth boosts that number even higher since that includes my home.  I certainly plan to use the ACA premium tax credit when I FIRE, maybe CSR as well.  I didn't save over $1M to spend it on healthcare insurance!  Being a single person, I already paid higher taxes my entire working career, so this will be my chance to get a little bit back from the system.

Presumably this money you will be "getting back" from the system will come from the taxes paid by the children of those families that were paying lower taxes than you during your working life?


In part, yes.

Quote
I say this as a single person without children myself. And while it is a little annoying that people receive dramatic tax cuts simply for marrying someone else, it certainly does make sense for us to incentivize people to have at least a few children. Right now birth rates are well below replacement in the USA and have been dropping rapidly* since the 2007/08 economic crash. While both our economy and our ecology could make do with somewhat fewer people than are alive today, trust me that neither you nor I want to live our more elderly years in a country where the population is falling too rapidly.

*Well rapid by demographic standards. In 2008 we were at 2.12 births per woman, we're now at 1.75 births per woman and continuing to fall. Given the current trendline (always a risky way to try to predict the future), we'll be looking at Italy level numbers in another 4-5 years.

I'm not opposed to the way things are now as to tax credits for kids, property tax funding for schools, etc.  But I'm not going to feel guilty for legally using a taxpayer subsidized program, either.

scottish

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Re: I wonder why healthcare is so expensive in the US?
« Reply #43 on: June 30, 2018, 03:36:40 PM »
I had an MRI a few months ago.  The bill was for $1500, but my insurance (TRICARE) only paid them $250.  I pay nothing out of pocket.  Was the cost of the MRI actually $1500, was the imaging center trying to high-ball the price, or was my government-funded insurance being stingy?

Healthcare facilities take a hit on insufficient payments such as from Medicare and Medicaid.  I've heard of hospitals having increased volume while losing money due to the increase in Medicare and Medicaid patients.  Someone else paying has to make up the difference.  Not everyone could get a Medicare rate if the facility is to survive.  They've already been known to start cutting different services.  Healthcare facilities should be compensated fairly.
 
   A few years ago I had an MRI of my back, I told them I didn't have insurance and wanted the best price.
They said it would be $380, I said, OK let's set a date. They ask can you come back at 9pm.
 I had to wait a whole 8 hours for an MRI!!
 When I mentioned this to my doc, he said, ya, we have a glut of MRI machines in the area.
 I'll never know if the insurance company would have negotiated a better price.

It sounds like you got a better price.  The average MRI cost is $2611 (googled).  Maybe it was an older outdated MRI machine.

Just for comparison purposes, I had an MRI done on my shoulder a few years ago.   There was no charge to me, however I had to wait about 5 weeks and my appointment was at 03h00 in the morning.   

Now it wasn't an urgent case.   So this was probably an example of effective use of our public health dollars.

Michael in ABQ

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Re: I wonder why healthcare is so expensive in the US?
« Reply #44 on: June 30, 2018, 03:59:03 PM »
Not sure if anyone's seen this, but Vox.com has started to collect ER bills from across the US - https://erbills.vox.com/. For this Canadian, it's been an eye-opening read. The number of families with good insurance who still end up with significant bills for minor visits just blows my mind. I really don't understand why this isn't a bigger issue across the country.

Forget single payer, how hard could it be to legislate price transparency? If there are such things as insurance networks, why not legislate that any charge outside the network must be agreed to up front? How are hospitals within an insurance network allowed to even hire people who are not part of it?

Are those the original bills or the statements of what people are paying after their insurance discounts it? I've never paid more than $100-200 out of pocket for any medical bills and they've run the gamut from $100 doctor visit to $10,000+ hospital stays. In the case of those ER and hospital bills my insurance has usually paid around 30-40% of the face value of the original bill.

skibum

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Re: I wonder why healthcare is so expensive in the US?
« Reply #45 on: June 30, 2018, 05:43:38 PM »
Americans need a Tommy Douglas.

Not if it leads to a Canadian style system.  The US is usually ranked about #37 in regards to healthcare compared to other countries.  Canada comes in at #30.  No thanks, please give me a system like France or Switzerland that comes in the top five on a consistent basis.

Is that the WHO ranking? That is pretty weighted to efficiency, rather than outcomes. Commonwealth fund puts the US at 11, with France at 10 overall. https://www.commonwealthfund.org/chart/2017/health-care-system-performance-rankings Canada doesn't come out much better at 9.

In any case it's clear that the US spends a higher percentage of GDP on health care at 16.6%, and in many cases gets worse outcomes. (E.g. infant mortality) Really it depends on what you are looking for. I would never argue that Canada has the best system, but there are no worries about the cost of catastrophic care, or of losing health care access with job loss or poverty.

skibum

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Re: I wonder why healthcare is so expensive in the US?
« Reply #46 on: June 30, 2018, 05:49:24 PM »
Not sure if anyone's seen this, but Vox.com has started to collect ER bills from across the US - https://erbills.vox.com/. For this Canadian, it's been an eye-opening read. The number of families with good insurance who still end up with significant bills for minor visits just blows my mind. I really don't understand why this isn't a bigger issue across the country.

Forget single payer, how hard could it be to legislate price transparency? If there are such things as insurance networks, why not legislate that any charge outside the network must be agreed to up front? How are hospitals within an insurance network allowed to even hire people who are not part of it?

Are those the original bills or the statements of what people are paying after their insurance discounts it? I've never paid more than $100-200 out of pocket for any medical bills and they've run the gamut from $100 doctor visit to $10,000+ hospital stays. In the case of those ER and hospital bills my insurance has usually paid around 30-40% of the face value of the original bill.
It depends. For each bill they choose they go into detail about what was covered (if anything). There was one recently about a man who had insurance, and actually checked before he had surgery if the hospital was in his network https://www.vox.com/2018/5/23/17353284/emergency-room-doctor-out-of-network. It was, but the surgeon wasn't, so he ended up with a $7,900 bill.

DreamFIRE

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Re: I wonder why healthcare is so expensive in the US?
« Reply #47 on: June 30, 2018, 06:16:58 PM »
Not sure if anyone's seen this, but Vox.com has started to collect ER bills from across the US - https://erbills.vox.com/. For this Canadian, it's been an eye-opening read. The number of families with good insurance who still end up with significant bills for minor visits just blows my mind. I really don't understand why this isn't a bigger issue across the country.

Forget single payer, how hard could it be to legislate price transparency? If there are such things as insurance networks, why not legislate that any charge outside the network must be agreed to up front? How are hospitals within an insurance network allowed to even hire people who are not part of it?

Are those the original bills or the statements of what people are paying after their insurance discounts it? I've never paid more than $100-200 out of pocket for any medical bills and they've run the gamut from $100 doctor visit to $10,000+ hospital stays. In the case of those ER and hospital bills my insurance has usually paid around 30-40% of the face value of the original bill.
It depends. For each bill they choose they go into detail about what was covered (if anything). There was one recently about a man who had insurance, and actually checked before he had surgery if the hospital was in his network https://www.vox.com/2018/5/23/17353284/emergency-room-doctor-out-of-network. It was, but the surgeon wasn't, so he ended up with a $7,900 bill.

I'm not sure if that was a case of having to pay out of network deductible or balance billing, but it takes me back to the balance billing discussion in the ACA thread.   The state you are getting care in makes a difference as well:

https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg1983956/#msg1983956

pecunia

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Re: I wonder why healthcare is so expensive in the US?
« Reply #48 on: July 01, 2018, 10:45:14 AM »
Dreamfire:
Quote
The state you are getting care in makes a difference as well:

I guess almost anywhere in the US you shouldn't go to the doctor until you are in the state of absolute misery.

Yabous

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Re: I wonder why healthcare is so expensive in the US?
« Reply #49 on: July 01, 2018, 12:47:34 PM »
Thanks to a helpful relative, i just bought an annual supply of medications from Israel for $180 that was costing me $3,000 here. This is basic and widely used medication, nothing fancy. So ridiculous. We are getting royally **&&%% and can't seem to do anything about it. I hope this is THE issue of the midterm elections.