Monday, November 19, 2018

Every part of health care industry is accusing the rest of ripping you off

To understand why American spends such a shocking amount of health care you don’t need a degree in economics or even a strong understanding of the numerous laws which govern our system. All you need to do is listen to what every part of the health care industry is saying about every other part. On twitter the industry is pointing out how basically every part of the system use their market/legal/political power to rip you off.
Insurers blame drug makers, hospitals, physicians groups, and individual doctors
For example the health insurers are repeatedly blaming the drug companies for exploiting their government granted monopolies to “price gouge” sick children and their desperate parents. Price gouging the insurers claim is because the drug makers known people have no alternatives.
The insurers also blaming the hospitals,  physician groups, and doctors for taking advantage of people in the emergency room. When people are at their their most vulnerable, can’t shop around, or even say no; insurers are pointing out hospitals and doctors take advantage of people by charging ridiculous prices.
Drug makers blame hospitals, doctors and insurers
Of course the finger pointing goes both ways. The drug makers blame the Pharmaceutical Benefit Managers (often own by insurers) for high cost. They blame the hospitals for marking up medication by as much as 700%. They also point out that most of rapid growth and health care spending is really been drive by the high prices for hospitals and doctors.
The hospitals blame the drug markers and Pharmaceutical Benefit Managers
In turn the hospitals are blaming the drug makers and PHB for charging too much. Pointing out insane price increases that is currently take place. In fact the hospitals are so convinced that “Big Pharma” and PHB are a ripping people off they created their own non-profit drug company, Civica Rx. An organization that comes very close to accusing drug makers of putting people lives at risk for profit.
Physician groups blame insurers
Physician groups are blaming people’s financial difficulties on insurers refusing to pay the high prices they demand. Leaving people with crushing surprise bills.
Conclusion
The simple fact is that they are all right to a large degree. When the health care industry itself keeps telling us the system if full of price gouging, monopoly exploitation, and abusive practices we should believe them.

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  16. I don't dispute that there is plenty of finger pointing to go around. Indeed, I argue that the oft-cited healthcare prices used to compare the *price* of US healthcare to other countries are methodologically faulty, mostly wrong (outputs), and that it's an effort by the health insurance industry to deflect attention away from themselves (the widely cited stats are produced by a payer trade group, IFHP). However, this sort of behavior is a *mostly* natural response to people looking for scapegoats. No one likes to be made out to be responsible, especially when their own neck is on the line.

    The reality is that US health spending is well explained by our exceptionally high income levels and it is unlikely to be explained by idiosyncratic features of our system, such as the number or existence of private payers (proportionally larger in the US, but significant in many countries), lack of single payer, the organization of hospitals, or what have you.

    A selection of lengthy blog posts wherein I explain these issues in excruciating detail.

    high well-measured incomes explain US health spending

    It's not the prices (it's quantities per capita)


    Our mediocre outcomes are explained by diminishing returns to spending plus higher behavioral/lifestyle risk factors

    The rising health share of income does not imply "starvation" or general decreases in living conditions

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