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Comments (236)

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  tptacek
  I buy that the locus of American overspending is in fees charged by providers (my understanding is that a further principle component of that spending is in end-of-life care).The problem, though, with going after pharma costs, and pharma benefit managers is that pharma is a relatively small component of overall spending; it's less than 10%. That is to say, you could make all pharmaceuticals entirely free, and we'd get at best a 10% discount on what we pay. I don't think any of us would be satisfied with that!This is data from the most recent (as of last year) CMS NHE:https://nationalhealthspending.org/
• novok
  When you really dig into the difference it's metabolic health that is driving most of it.
• bcooke
  This project reminds me of a book I highly recommend called An American Sickness. It sheds a lot of light on the same sorts of issues.One underlying, perverse incentive behind many of the problems is that insurers are regulated based on percentages of spending rather than total costs.The US passed laws meant to limit marketing and overhead that tied insurers economics to the size of the overall medical bill... which means as healthcare spending rises, the dollars they’re allowed to retain can rise too, which basically means they're incentivized to drive costs up rather than down.Here's a link to the book: https://www.helmpublishing.com/products/an-american-sickness...
• linsomniac
  Healthcare administrative overhead in the US is pretty huge and has been for a long time. Back in the early 90s I worked on claim processing software and I recall it being discussed as being around a third of healthcare costs.Last year this podcast said that nobody wants to solve this because solving it is going to eliminate (IIRC) hundreds of thousands of jobs. Which is a point to consider.In 2021, the U.S. spent $1,055 per capita on healthcare administration, while the second-highest country — Germany — spent just $306 per capita, Japan is $82. https://www.pgpf.org/article/almost-25-percent-of-healthcare...Administrative spending accounts for between 15% and 30% of total medical spending, with lower estimates covering only billing- and insurance-related expenses, and higher ones including general business overhead such as quality assurance, credentialing, and profits. https://www.healthaffairs.org/do/10.1377/hpb20220909.830296/The Center for American Progress estimates that health care payers and providers in the United States spend about $496 billion annually on billing and insurance-related (BIR) costs alone. https://www.americanprogress.org/article/excess-administrati...The time burden on physicians is staggering — estimated at $68,000 per physician per year spent dealing with billing-related administrative matters. https://www.pgpf.org/article/almost-25-percent-of-healthcare...
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  graemep
  > The US spends ~$14,570 per person on healthcare. Japan spends ~$5,790 and has the highest life expectancy in the OECD. That gap is roughly $3 trillion per year.The difference in life expectancy will be influenced by multiple factors and may have more to do with diet and lifestyle than with healthcare.Japan also spends less per capita than the UK, France or Germany. The US spends a lot more than any of those so the US system is bad value for money.
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  cmiles8
  Challenge is the whole system is just a mess. Medicare probably lays too little. Commercial insurers have formed a mountain of red tape and bureaucracy and arguably pay too much, although individual bills (EOBs) are rarely logically defensible against any scrutiny.Healthcare providers try and combat all this by literally just making up pricing and trying to negotiate something while also having bloated administrative structures that raise costs for all.Nothing about the current state of the healthcare system makes much sense to anyone that tries to peel back the onion.
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  conductr
  Medicare prices are too low to operate on. They generally factor in the bare minimum or slightly less for the variable costs of a procedure but severely under value the fixed costs of providing the same procedure. So those costs largely get pushed to commercial payors as those are the only ones who can shoulder it.There’s plenty of arguements about waste and executive compensation but when I was a healthcare CFO we had our financials separated where I could see individual hospital performance and all the executive/corporate stuff was separate and it still was an issue as basic capex was hard to keep up with in a hospital that had a low % of commercial patients.
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  WarmWash
  Firey take, but health insurers are not the problem they are made out to be. They're on your team and benefit from lower prices just as much as you do. They don't make any money either, don't argue with me, buy their stocks if you are so convinced and see how that goes over.Health care providers carry immense blame. It's full of passionless people in it for the outsized paychecks, who once inside will just seek whatever local minimum to stay employed.
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  timtim51251
  Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits.Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money.Several doctor friends have told me this as well.
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  umvi
  > Japan spends ~$5,790 and has the highest life expectancy in the OECDIs Japan's life expectancy because of its healthcare or culture? I'm pretty sure Americans would not live to the same age as Japanese even with Japanese healthcare because of our low nutrition high sugar diets...
• turlockmike
  Unregulate the insurance industries problem solved. Let people actually buy insurance for it's intended purpose. No insurance company would pay these rates willingly, they do it because of all the regulations. They aren't allowed to profit normally, so they find ways around it. Just let them operate normally, like all sorts of other insurance programs.
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  rexroad
  Author here. The 254% figure comes from RAND Round 5.1. I built a Python pipeline on CMS HCRIS cost reports (FY2023, 3,193 hospitals) to compute cost-to-charge ratios by ownership type. The surprising finding: nonprofit hospitals have a median markup of 3.96x actual costs. All scripts are in the repo. Happy to discuss methodology.
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  notfried
  I like this. It'd be great to see such a table of the key issues with proposed solutions, to highlight how the waste isn't an insurmountable impossibility to solve. Having said that, federal lobbying by the healthcare industry was $750 million in 2024 [1], and this is the blocker that needs to be addressed first to be able to enact change.[1] https://www.managedhealthcareexecutive.com/view/health-syste...
• pfdietz
  I think the problem is the system is designed to inflate what is being done to the point it's barely affordable. This new treatment requires more equipment and time? No problem, it's x% more effective, so it gets rolled out. And as medicine expands, the opportunities to make it marginally better also increase.If what we defined as care was constant, it would get cheaper over time. But it doesn't stay constant.
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  Sanctuary8542
  Not in Marylandhttps://en.wikipedia.org/wiki/Maryland_hospital_payment_syst...
• nativeit
  This is an interesting way of presenting a topic, I like it. Especially if it’s got included datasets that allow others to mess with said topic. I don’t want to suggest bloating it up with any complicated UIs, but a Jupyter notebook could be nifty. Maybe not for this specific topic, but other data-heavy subjects.
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  edgarvaldes
  As a non-American, I find it interesting that so many comments in the thread insist that "No, American healthcare is not that expensive compared to that of other countries; no, the costs of the American healthcare system are not high due to greed and capitalism; and no, the American healthcare system cannot be cheaper or better, it is not perfect, but it works as it is."
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  bawana
  Does anyone here remember how health care was delivered before medicare and medicaid was enacted in 1965? It was not pretty. Prices were low then because it was all private pay and charity. Why do you think so many hospitals are named after saints? The church made a significant contribution to running healthcare. But when the govt got involved in 1965, the MBAs started salivating. Now we have a system that is built around govt style procurement that we cannot afford. As our population ages, as salaries continue to remain flat, we will have hard choices to make.
• nomilk
  Interesting case study (video; ~2 min): https://www.tiktok.com/@thesephew/video/7476558168059809067
• busterarm
  There's so much culturally different here that blaming just the differences in the system of health care is effectively meaningless.Yearly physical exams are much more thorough in Japan. Unless you are optimally fit, you will be prescribed lifestyle changes to make and there is a strong expectation that you will work hard on these. Your employer will be involved. There is _tremendous_ social pressure if you are overweight.Healthy food options are ubiquitous there with healthy and cheap meals available 24/7. Combini food certainly has bad options but nothing compared to American fast food or the American diet generally.There are other health problems that are significantly overrepresented in Japan compared to the western world. Alcohol, smoking and stress-related illnesses. Liver & Kidney diseases. Peptic ulcers, GI problems in general.
• kstrauser
  No, they don’t. Medicare’s one of the better payers among major groups.Source: owned a medical practice for over 20 years, and was staff engineer at a company that processed medical bills.
• rimbo789
  Having worked in for profit health care pricing and costing yup that makes sense.The layering on of profit margins causes costs to grow exponentially
• rybosworld
  For a country that prides itself on CapItAlIsM, U.S. healthcare is the farthest thing from it.- Doctors and hospitals don't compete on price- Prices aren't just opaque, they are unknowable- Shopping around is not possible- Insurer incentive is to maximize billing (cost). They pass along cost as increased premiums to an employer. Employer passes along increased costs to employee as below-inflation wage increases
• andai
  Is the author GPT-5?
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  legitster
  If you ever want to "sanewash" healthcare spending in the US, this random guy stood up an entire website to argue that per-capita healthcare spending in the US is more or less in line with expectations based on per-capita income:https://randomcriticalanalysis.com/why-conventional-wisdom-o...TL;DR: As people/countries get richer, a larger share of their money goes towards consumption. It's not just that Americans pay more for the same procedures (sometimes they do, sometimes it's just sticker prices) but we consume more healthcare the more money we make. So it skews costs up disproportionally. That wealth also enables chronic health and lifestyle problems that are expensive in their own right.I'm not sure I'd buy the theory entirely, but it's very well argued and as a null hypothesis it makes a lot of sense.
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  nomilk
  I recently travelled to Vietnam for dental work, it's really shocking how easy to it to shop around when dentists actually publish their price lists online for easy comparison/perusal. In my native country, dentists rarely if ever publish prices online, and it's hard to get prices over the phone.If hospitals could be forced to publish price lists, it would be game changing, allowing patients to shop and compare quality/prices.Trump vaguely mentioned he'd try to do something like this but it's not clear what he's attempting: https://www.youtube.com/watch?v=8PQ7l905aVM&t=10h57m30sMaybe this? https://trumprx.gov/
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  paulddraper
  This is a believable result. Meta-analysis is 141-259% [1].Three reasons:1. Medicare has quasi-monopolistic negotiation power that private insurers can only dream of -- Medicare spend two-thirds of all the private insurers combined. That's why private insurers would combine in a heartbeat if the FTC allowed it.2. Moreover, that Medicare volume is concentrated in a specific segment of the market. If many providers dropped expensive United contracts, the insured people/companies might move to a new insurer. But Medicare's base will never leave.3. Since Medicare covers older individuals, often on a fixed income, there is natural discriminatory pricing. (Think of the "senior discount" at your local entertainment venue.)[1] https://www.kff.org/medicare/how-much-more-than-medicare-do-...
• Mistletoe
  I recently had a preventive CT angiogram and the cash price was $500 and the price with insurance was going to be $1000. The system we are in makes no sense at all.
• krautburglar
  Not to hold the commercial insurers' balls here, but if I were a doctor, I'd probably demand more from them. The patient age distribution is not uniform. Most patients are going to be old. If medicare gives me peanuts, I just have to deal with it, for if I don't accept whatever crumbs medicare sends my way, I no longer have a practice. If a private insurer tries to throw me peanuts -- especially when that insurer's customers only make up a percent or two of my practice -- I can easily tell them where to shove those peanuts, so they had better pay well.
• scotty79
  They are intermediary between buyers and sellers paid with percentage of the price.They have every incentive for the price to be as high as possible.Such entity can't be left to utilize market forces for the same reason cancer can't be left to utilize human physiology.
• calebm
  "We've negotiated special rates on your behalf."
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  qwertyuiop_
  Its called American Medical Association racket.
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  underlipton
  No debate about the viability of Medicare-For-All is made in good faith, at this point. The only valid debates are about implementation. No one should entertain any move conversations about whether we should go to a single-payer system, only how we should.
• etchalon
  The US' refusal to move to a single-payer system, while refusing to accept a world where poor people just die if they can't afford healthcare, creates a lot of deeply weird side effects.
• biang15343100
  [dead]
• panny
  [flagged]
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  recursivedoubts
  [flagged]
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  profsummergig
  The end goal of AI + Robotics has to be robots doing surgery on humans, for a little more than the price of electricity.