Mapping the US healthcare system’s financial flows

https://healthisotherpeople.substack.com/p/an-abominable-creature

by brandonb • 8 months ago

178 166 8 months ago

healthisotherpeople.substack.com

Taikonerd4• 8 months ago

It's a truism that America's system was never designed -- it's a patchwork of different pieces that each pay for some people in some situations.

But I've been reading about our system, since I fell down a rabbit hole a couple years ago. Things are bad, yes, but there are actually interesting ideas out there, and real efforts at reform that are being tried.

For example, did you know Maryland has a different way of funding hospitals than most other states? [0] And that other states are interested in copying it?

[0] https://www.vox.com/policy-and-politics/2020/1/22/21055118/m...

bombcar8• 8 months ago

A system built as a mish-mash patchwork is likely to be solved by a similar "ground-up" framework.

Each state should be free to experiment (as Maryland has done here) and the federal levels should be restricted to providing funding and basic guidelines that have to be met.

Part of the problem is that as you begin to delve in and see where the outflows are, you start to realize that fixing the fundamental problem involves making the people healthier in general, which will rumble the very foundations of Wall Street.

jpalawaga• 8 months ago

One of the great powers of federalism is not having to duplicate efforts for every state. It also reduces cost by allowing 'one-size-fits-all' and economies of scale, rather than each state having its own bespoke whatever.

Many countries around the world enjoy the benefits of coordinated public health departments. Part of the United States' poor response to COVID was because there was no central public health department that could work closely with state agencies to e.g. provide data about what's going on, share best clinical practices, etc. Each state is an island.

So no, I don't agree that the only goal of the federal government should be piggy bank. States should have a lot of latitude with their policies, but generally standardizing things across the nation would be a net positive.

nneonneo• 8 months ago

Canada’s public healthcare system was started in Saskatchewan, one of the provinces, and rapidly copied to other provinces (and later to a federal level): https://www.cma.ca/healthcare-for-real/who-started-canadas-u...

If one state can manage to make it actually work, it might be enough.

doctorpangloss• 8 months ago

There are already numerous and simple policy levers that actually affect costs and cannot be gamed. Such as the age you become eligible for Medicare. You don't have to reach for anything innovative like global hospital budgets. I'm skeptical of your category of reforms - you really mean, "benign-looking administrative decisions," because if you're not making any hard choices, you're not making reforms. I would hardly call it "real efforts."

almosthere• 8 months ago

So it's a jobs program

silisili2• 8 months ago

Not all of it, but definitely the insurance part of it IMO.

It's hard to get an actual number, but many say nearly 1 million people work in health insurance in the US. And I'm not sure that even counts the people whose job it is to interface with them. That's a ton of jobs(and salaries) that likely wouldn't even exist in a sane system.

IAmBroom6• 8 months ago

It's hard to get an actual number

It's tracked by the Dept of Labor.

MarkusWandel• 8 months ago

All the categories on the right side look perfectly reasonable. However what fraction of those big categories on the right, Hospitals and Physicians... that make up over half of the total, is siphoned off to pay for administratium or "shareholder value" and what fraction actually pays for medical care delivered?

programmertote• 8 months ago

I'd really love to see the breakdown between how much we spend on physicians/doctors vs. caretakers (nurses, therapists, etc.) vs. how much on hospital admin and other stuff.

At least in UK's chart, "GP & Primary Care", "Private GP Services" and "Administration" are separated. Same in Germany too.

Retric2• 8 months ago

If by shareholder value you include insurance companies etc not just the institutions themselves, it’s well over half.

Doctor time talking to an insurance company either directly or through paperwork is not actually providing any care during that time. Where things go vicious is because doctors are now so inefficient the time they are actually useful becomes increasingly valuable driving ever more paperwork to justify that time.

nradov4• 8 months ago

Physicians spend very little time directly dealing with insurance companies. They (or their employers) hire back office administrative staff for that. This is somewhat wasteful and inefficient but it doesn't directly impact the time that clinicians have available for patient care. Usually the physicians only have to get directly involved in rare peer-to-peer consults with health plans for complex cases that fall outside of normal clinical practice guidelines.

IAmBroom6• 8 months ago

Yes, the diagrams are deeply flawed, in that they seem to suggest 100% of the money input to the system goes to hospitals, hospices, healthworkers, and so on.

I don't see a single outcome pointed at insurance companies... somehow.

yannyu2• 8 months ago

The article takes this on a couple times:

The outcome is $4.9T - which would make it the 3rd largest economy in the world, a high 8% admin costs - compared to the UK’s 2% admin, with medical bankruptcy still possible. We’ve never agreed on what we value. So we built a system that embodies our disagreement: employer-based coverage (market choice) plus Medicare (social insurance) plus Medicaid (safety net) plus exchanges (regulated markets).
Decision #1: Workers pay at least twice

Here’s the first thing that jumps out: if you work a job in America (and you presumably do, to afford the internet where you’re reading this), you’re already paying for healthcare in multiple places on this chart:

    Taxes: federal, state, and local taxes finance Medicare, Medicaid, and various public health programs in so many places. Our attempt at embedding it in single payer.

    Payroll: if you’re employed, your employer pays taxes on Medicare (even though you presumably can’t use it until you retire at 65). This is a cost that doesn’t go to your salary.

    Insurance premiums: get deducted from your paycheck to fund the employer group plans ($688B from employees alone).

> Could America make this choice? Technically, yes. Politically, we’d need to agree that healthcare is a right we owe each other, funded collectively through taxes. That would mean massive tax increases, eliminating private insurance as the primary system, and trusting a single federal agency.

The operational resistance alone would be too much: I’ve watched hospital execs squeeze out thinning margins and payer executives navigate quarterly earnings calls. We’re talking about unwinding a $1T+ private insurance industry, reconfiguring every hospital’s revenue model, and convincing Americans to trust the federal government with something they currently (sort of) get through their jobs. That ship didn’t just sail - it sank decades ago.

velcrovan• 8 months ago

Amazing, every single dollar goes to care! Not a single dollar to overhead! Where are these insurance companies' profit margins coming from? How do they even pay their executives' salaries? Boy have I been mistaken about how inefficient the American system is

asmodeuslucifer2• 8 months ago

Beat me to it. This chart is only 1/2 complete. It doesn't show where the money goes after hospital care, for instance.

harvey92• 8 months ago

Do you mean the breakdown of staff wages, equipment and so on?

gwbas1c2• 8 months ago

How do they even pay their executives' salaries?

I suspect less goes to executives than you think. Most of it is going to pay employees in the insurance industry.

The irony is that they are being paid to say "no." Perhaps if they instead went to work as service providers, we could get more services for what we spend.

dangus10• 8 months ago

Healthcare executive pay is pretty darn high, more money than any family needs to live comfortably.

Keep in mind this is just for Blue Shield California. There are executives of other health insurance systems in other states and regions who are making similar compensation.

However, I'll go ahead and say right now that I support the idea of these executives being paid these salaries, but on one condition: that we first achieve the goal of 100% of Americans having affordable access to healthcare. Once that goal is achieved, then we can start paying executives big bonuses and incentives. Deal? (Yeah, right...)

https://www.blueshieldca.com/content/dam/bsca/en/member/docs...

Below is a summary of the compensation paid in 2024 to Blue Shield of California’s President and Chief Executive Officer (CEO), Chief Financial Officer (CFO), and top three highest paid executives (other than the CEO and CFO) who were employed by Blue Shield of California at year-end.

Paul Markovich

President and Chief Executive Officer

$11,191,674

Sandra Clarke

EVP, Chief Operating Officer

$5,765,368

Peter Long

EVP, Strategy and Health Solutions

$4,360,245

Lisa Davis

EVP, Chief Information Officer

$2,873,613

Michael Stuart

EVP, Chief Financial Officer

$2,406,837

Some other CEOs:

Cerner (EMR provider to the VA), $35 million pay package: https://kffhealthnews.org/morning-breakout/cerner-to-pay-new...

Pfizer, $24.6M pay package: https://www.fiercepharma.com/pharma/rebound-year-pfizer-ceo-...

Epic Systems is a private company, so there's no executive pay information, but the founder Judy Falkner's estimated net worth is $7.8 billion. Perhaps Epic could reduce the price of its very expensive software for providers to help ease healthcare costs and maybe Judy could give up some of those billions and not notice any difference in her quality of life?

HDThoreaun4• 8 months ago

Absolutely not. Over use of service is already one of the bigger problems in US healthcare. We need more death panels, not less.

klustregrif• 8 months ago

I suspect less goes to executives than you think.

How can it be less than nothing? The graph is literally showing that all the entities that are not care facilities operate without any costs and without any profits. Apparently both CEO’s and workers at these organizations are volunteers.

redmattred• 8 months ago

Where are these insurance companies' profit margins coming from?

Vertical integration.

UnitedHealthcare's (Larger insurance company in the US) profits are effectively limited by the Medical Loss Ratio rules from the Affordable Care Act.

But they are owned by UnitedHealth Group, which also owns OptumHealth (the largest network of physicians in the US), OptumRx (pharmacies), and OptumInsight (technology consulting, which goes into the COGS for UnitedHealthcare). This is where they make their profits.

UHG controls which physicians + pharmacies are in their network and what their negotiated rates for many services are (the exception being medicare + medicaid).

Here's a write up on their strategy: https://www.unionhealthcareinsight.com/post/unitedhealth-gro...

And an infographic that breaks it down: https://static.wixstatic.com/media/be1b8b_b0d4ebb04ce04b44a3...

NickC252• 8 months ago

United Health needs to be broken up.

They are a racket.

Nicook• 8 months ago

Are they limited by medical loss ratios, or does that just inflate costs to get more profit?

riku_iki• 8 months ago

Amazing, every single dollar goes to care! Not a single dollar to overhead! Where are these insurance companies' profit margins coming from?

they kinda have it on chart but without overhead numbers: insurance collects 1T of payments, than for business segments, they pay around 60% of that as medical expenses, and for individual plans it is more like 40% of medical expenses, meaning for individual plans insurance corps have 60% profit margin.

IAmBroom6• 8 months ago

"A Fairytale Map of Every Dollar of America's $5T Healthcare System" is the complete, accurate title.

Is this funded by an insurance company?

Thrymr• 8 months ago

The author calls himself a "Real Estate Novelist and recovering healthcare consultant" (https://substack.com/@andrewtsang).

IAmBroom6• 8 months ago

Ah, so it's fiction?

SoftTalker• 8 months ago

Did he ever have time for a wife?

nycticorax• 8 months ago

It would help if you would say what exactly you think is wrong with it.

bombcar8• 8 months ago

Here's an idea. If other countries can provide healthcare for much less per patient, why can't they sell that to Americans?

In other words, allow US citizens to "opt out" of the US healthcare system and participate in the German one? You'd have to make some allowances for replacing taxes with costs, billing, and allow "German" healthcare to operate in the US ...

watwut• 8 months ago

Healthcare insurance works when everyone including currently healthy people participate. What would happen is only Americans needing an expensive healthcare signing in.

piva00• 8 months ago

The systems are so different there's no product to sell, it's a whole system of healthcare that permeates through society... You can't sell a national-level system of healthcare as a product, it's done through policy.

systemtest3• 8 months ago

I don't think US doctors will want to work for German pay.

bombcar8• 8 months ago

That's why you let German doctors work for German++ pay ;).

conception• 8 months ago

Resident salary: approx. € 60,000 - 75,000 Specialist salary: approx. 75,000 € - 98,000 Senior physician salary: approx. € 90,000 - € 150,000 Chief physician salary: approx. € 150,000 - € 370,000

Seems fine? Especially if you subtract a substantial amount of benefits fringe.

hibikir2• 8 months ago

Basically every bit of the current system, from how much people are paid to how a hospital looks like, is a side effect of the way we pay for healthcare, and the way we decide which provider to select. So we cannot just wave a magic wand and get the German system, as a whole lot of capital decisions are now just straight out wrong.

We see similar things in education. People wonder how many European systems are cheaper than US universities: Well, it's very easy to see once you attend a university in Spain and then one in the US. The shape of the university, from facilities to salaries to class sizes, make them look like completely different organisms, even though 18 year olds come in from one side and come out with degrees in the other. And note that this is also connected to healthcare: How many doctors do we train, or bring in from other countries? How many years do they spend training, and how much debt do they incur getting training? How much are they going to ask in pay just to handle that debt?

Changing the US system is a very good idea, but the changes would be very traumatic to most people working for the system, or invested in the system. All of them would lobby against changes that make their lives worse, and therefore makes legislature that makes the change happen very difficult to pass.

jimt12342• 8 months ago

The healthcare system in the US is, indeed, the best...if you're rich. If you're not rich, you're gonna spend a lot of time on the phone, arguing with bureaucrats and getting treated like shit.

A friend of mine is rich. We both have a health insurance plan from UnitedHealthcare. His experience is radically different from mine. He can make a phone call, and actually talk to his doctor within a few minutes. He can see his doctor the same day he asks to. He talks to one person who manages all the BS for him.

systemtest3• 8 months ago

If you're not rich, you're gonna spend a lot of time on the phone, arguing with bureaucrats and getting treated like shit

Sounds a lot like the Spanish healthcare system.

IAmBroom6• 8 months ago

The healthcare system in the US is, indeed, the best...if you're rich.

Actually, the data doesn't even support that notion for the rich. But then, they can opt to fly to a specialist...

dbg31415• 8 months ago

Where are salaries? Where are administration overhead? Where are insurance company profits and dividends coming from?

This whole thing loses all credibility by not listing those things.

jimt12342• 8 months ago

If we're gonna stick with private insurance in the US, we should detach it from employment. The current system has created a society of indentured servants, not for money, but for "health insurance". The current system is expensive for employers that are often mandated to provide health insurance plans. And it forces people to work for something they have little or no control over.

When you work for money, you can do whatever you want with the money once you've earned it. But being compensated with "health insurance", you've got almost no control over it; you get what the company gives you - and btw, you can't purchase the same thing on your own, with your own money (way too expensive for most middle-class folks).

Detach health insurance from employment. Open "health insurance plans" to the free market, just like auto insurance. Free employers from all the administrative overhead of managing health insurance for employees (the stock market will love it!) And let health insurance companies work for their actual customers (health care patients!)

Or, just open Medicare to all.

srameshc2• 8 months ago

One of the best explanations I have ever read about American Healthcare. Even after such good infographic it is still hard to comprehend such complexity.

The $441B in prescription drugs - the story of incentivizing American innovation over price controls.

This itself speaks for how messedup the entire design is.

lvl1552• 8 months ago

It actually doesn’t incentivize innovation. That’s the biggest scam in healthcare. If it actually led to innovations and notable uptick in quality, other countries would have done the same. The whole argument is so flawed it makes my brain hurt.

srameshc2• 8 months ago

I think the author seems to be using sarcasm when he said innovation.

nradov4• 8 months ago

How is the argument flawed? On average the USA has more innovation than any other major country in pharmaceuticals in terms of new drugs per capita per year.

daft_pink• 8 months ago

I wish they had this per capita in each country, so we could compare them.

jmpman4• 8 months ago

I’m concerned with anyone proposing “Medicare for all” in America, because they all state - for doctors who want to stay out of the system, they can be paid directly… that immediately causes a slightly different 2 tier system. Right now our 2 tier system is the 90% with health insurance and the 10% without health insurance. In the new Medicare for all, it will be the 99.9% on government insurance, and the 0.1% - the ultra wealthy - who dominate tax policy and are heavily financially incentivized to reduce their tax contributions to the public system. They will influence politicians to spend less on healthcare, with no impact to their health outcomes. The only system which will work in the US is one in which the ultra wealthy have an incentive to provide funding to the public system, and that seems like you’d need to force them to be on the public system too.

PieTime• 8 months ago

This is precisely what allows for the NHS to be cannibalized. They underfunded one of the best systems of healthcare and replaced it with private care for ultra wealthy while reducing quality of care for vast majority of people.

harvey92• 8 months ago

Private care has been available in Britain throughout the history of the NHS and is available to people far below the 'ultra wealthy' strata. Don't ruin a valid point with hyperbole.

cj2• 8 months ago

The only system which will work in the US is one in which the ultra wealthy have an incentive to provide funding to the public system, and that seems like you’d need to force them to be on the public system too.

In my state, I pay $15k/year in school taxes, yet I have no children. I pay $1000/year in property taxes to support my city's library, yet I don't have a library card. People are taxed for lots of things they don't actually benefit from. I don't think we would need to force rich people to use the plans. If they want to buy medical services from private doctors, sure we can let them.

The issue then becomes more about allocation of resources (how many doctors are available to be seen on the public system vs. only available to self-pay customers) rather than the issue being about how to collect taxes.

teachrdan• 8 months ago

This may be small potatoes, but I've heard it said that people like you benefit "by not living in a state full of dumbasses." There's definitely an indirect benefit from these payments.

0ckpuppet• 8 months ago

you can either build good schools or good jails, so contributing to your schools is contributing to your town infrastructure.

jmpman4• 8 months ago

In my state, the politicians attempt to fund the schools the least amount possible. Healthcare will fare no better.

apercu2• 8 months ago

Every western country that has a single payer system as far as I know allows for private clinics, doctors and labs.

I spent 18 years in Canada. The healthcare I got was as good as anything I received in America (in both cases it depends on where you live, unfortunately) and looking ahead to 2026 was cheaper (comparing my tax burden in Ontario to the terrible insurance I can afford for 2026 in America).

nradov4• 8 months ago

Healthcare quality and access varies widely between Canadian provinces. It's common for affluent Canadians to come to the USA as medical tourists and pay out of pocket for elective procedures like MRI scans or joint replacement surgeries due to excessive waiting times at home. There are advantages to the Canadian system but some clear downsides as well.

jjtheblunt• 8 months ago

is the 90% with health insurance and the 10% without health insurance

it's even more complicated, because you can have insurance fully accepted at one clinic and "not contracted" with a different clinic. it's a total mess.

rr8082• 8 months ago

That's the same as most countries then.

matthewdgreen2• 8 months ago

You're never going to make a system that prevents the ultra-wealthy from augmenting it with private services. You might, however, reduce the power of the ultra-wealthy.

jmpman4• 8 months ago

Not after citizens united.

sharts2• 8 months ago

All of that applies to military spending, highways, schools, etc.

Does that mean we can’t have these things unless the wealthy want them?

jmpman4• 8 months ago

The wealthy benefit from military spending as it keeps their resources secure. The ultra wealthy are also business owners who benefit from increased commerce made possible from the highways. They don’t benefit from paying for my father’s cancer treatment.

notepad0x903• 8 months ago

Insurance == Social Disease

There is a healthy concept of insurance where people pay to hedge against potential risk, and that's all fine and good. But one of the most insidious social diseases is mandatory insurance, or industries expecting individuals to insure themselves in any capacity whatsoever.

It is never ok for a business (or government) to offer a service that comes with risks, but then ask their customers/subjects to insure themselves for the risk to the business/government.

If I am charging people $100 for a service, then I ask them to insure themselves and everyone reliably insures themselves (the majority at least), they can still afford to pay my me $100, so why don't i just raise the cost to $100+$10000 where $10000 is the maximum the insurance will pay? You see the problem right, all the insurance achieved is the increase in prices, people still pay the same, you just now have a middle-man economy sucking up all the wealth/value people are generating.

If we could all agree on one thing, I wish it would be this. No more mandatory insurance in any context. Not fire, not flood, not health, not cars. Optional is fine, people who can afford it can hedge against the risk. But a bank shouldn't require fire insurance on mortgaged homes.

Businesses must eat the cost of doing business, in the end the price increase they impose will be less than the price increase of insurance mandates. That, or greed should be a felony (not happening).

For health insurance, it should be a simple subsidy for those who can't pay out of pocket. Some industries must be regulated, even in a capitalist free-market country. Health care, prisons, law enforcement, defense contractors, banks to name a few. Regulated as in centrally price-controlled.

For uninsured people that get sick, house burns down, car accident,etc... the government (for health care) or businesses convert the cost to debt. Same as when someone takes out a mortgage and refuses to pay at some point, or refuses to pay their car notes.

It's like we have had this 50+ year running experiment, it's failing really badly and everyone is coming up with ideas that don't involve scraping the experiment, just modifying it and waiting a bit longer to see if it works out.

coredog64• 8 months ago

For health insurance, it should be a simple subsidy for those who can't pay out of pocket. Some industries must be regulated, even in a capitalist free-market country. Health care, prisons, law enforcement, defense contractors, banks to name a few. Regulated as in centrally price-controlled.

Maybe not now, but 10-ish years ago that was the French system. Very poor people get outpatient care that is free at the point of service. Everyone else gets highly regulated private insurance with a strong market component. Emergent/inpatient care is provided by hospitals that aren't part of the insurance system.

There are definitely some trade-offs there, but I wouldn't be opposed to such a system in the US.

notepad0x903• 8 months ago

States should do their own trade-off calculation maybe, but at the federal level the policy makes sense.

cookingmyserver2• 8 months ago

so why don't i just raise the cost to $100+$10000 where $10000 is the maximum the insurance will pay?

Theoretically because you are not the sole provider offering that service and the patient could go elsewhere, or in this case, the insurance company would require the patient to go elsewhere. Obviously, this sucks absolute donkey balls and health care will always involve a healthy dose of "I can't just shop around for where to get help for a heart attack".

In my naive opinion banning discriminatory pricing (no special negotiated insurance pricing), the sale of medical debt, and counting bill forgiveness as tax deductible charity would be a good start. With the absolute technical and capital-intensive marvel that is modern health care I just don't see anyone being able to reasonably get away with no insurance. Maybe there is a mandated co-insurance for all plans that could be covered by HSA accounts that everyone would get access to. That way there is a cost that is transparent to the patient that scales. At that point though I would just go to single payer.

(Rant incoming) Another thing that might need to happen is billing caps based off of certain outcomes. Especially in the emergency medicine realm. If you go to the emergency room and rack up a huge bill for something simple there should be a cap on the amount the hospital can actually recover. All I see is (rightfully) constant bitching and moaning from ER staff that people should be going to primary care or urgent care for issues which are less resource intensive and cheaper. The issue is the ER could provide those same services for just as cheap. Build out those same capabilities in or near the ER. The triage nurse can then send those low priority patients to the facility right down the hall. The issue is hospital admins have no incentive to do that, because as you said, why bill $200 when you can bill a minimum of $2,000 when you have your patient captive.

I also think it is silly we ask people to self-triage. It externalizes a lot of the costs to other parts of society. I can attest to this from the constant Volunteer Fire Department air-raid sirens I hear followed by a "EMS to Well Now Urgent Care for Patient in Distress". I'm sure the volleys love having their evening interrupted when it could have been a simple walk down an aisle.

notepad0x903• 8 months ago

so long as insurances are the "single payer" the problem will never go away. The single payer should either be individuals or the government (by mandate).

LorenPechtel5• 8 months ago

Absolutely agree on the negotiated price bit. That is the root of an awful lot of evil.

I have no problem with the sale of medical debt--what's needed is sanity in the debt collection business. Combined with making one-party record the law of the land--you're automatically free to record telephone calls without notice.

Bill forgiveness as charity? No, that's counting twice. They didn't collect the debt in the first place, there is no profit to be taxed and thus you are deducting $0.

ER: Two problems here.

ERs are mandated to stabilize a patient, urgent cares are not. Thus you see people in ERs with situations that could be handled in an urgent care because the urgent care rejects them for unpaid bills. And the ER can't provide those services just as cheap--a big part of what you're paying for in the ER is potential even if it's not actually used. The freestanding radiologist books their machines as solid as can be done without too much friction. The ER needs the same machines but needs them available NOW. I've been in an urgent care over a kidney stone--they had a CAT manned and ready to go at 3am (the only urgent care in town even open at those hours even before you consider the machines--every ER needs those machines 24/7.) CATs don't cost much to run, the main cost is the machine and personnel time (operator and radiologist) and that's incurred whether it's doing anything useful or not. (And then the urgent care punted anyway. Yeah, you're right, stone, we can't deal with it, go over to the ER.)

I will also say that transport isn't always as simple as you make it out to be. Consider that stone I just mentioned--the ER was half a mile away, trivial under normal conditions. Even under those conditions I could have *slowly* walked it--except there was a major street in the way and I most definitely did not want to cross that. Is a taxi going to take the call? No. Call a friend/rideshare/ambulance.

lvl1552• 8 months ago

You can go one step further and make this a time-series. Costs skyrocketing. Quality of care actually going down across the country but especially in rural settings. Provider satisfaction plummeting. No one is happy…except greedy executives and shareholders.

warkdarrior• 8 months ago

No one is happy…except greedy executives and shareholders.

It is a fairly effective system to extract money from customers (patients) while also ensuring that patients do not use too many services (afaik, US population has shorter life spans than rest of Western world).

lenerdenator• 8 months ago

I'd be more interested in how much of that $5 trillion finds its way to shareholders.

Most people generally don't have a problem with the idea of being charged a fee for a healthcare service. They have a problem with a system that grossly inflates that fee so that people who had nothing to do with the service get paid at the expense of people who are ill or injured. And of course, with the people in the system who are heavily incentivized to make sure that those dead-weight actors get as much money as possible.

gwbas1c2• 8 months ago

So what does the US value?

Every time we (the US) try to fix / change anything, a bunch of wonks with irrational arguments whine and complain until they get their way. The initiative fails, and we don't fix / change anything.

In short, we value letting irrational sabotage any form policy making; because we don't exclude people who negotiate in bad faith.

7952• 8 months ago

Or people are acting in good faith (generally) but want to avoid being accountable for something deeply serious. You end up with a web that neatly prevents anyone really being held responsible for anything. In an industry that was supposed to be vocational and treat its duty as sacred.

phkahler• 8 months ago

One large thing missing. Where is the flow to insurance company profit, and provider profit?

EcommerceFlow• 8 months ago

The more free market an industry/service, the more efficient the outcome.

Why do people readily accept this for everything else, but don't see the reality in regards to healthcare?

postflopclarity• 8 months ago

the more competitive, orderly, and fair market, the more efficient the outcome

that is _not_ synonymous with "absent of regulation."

market failures exist, believe it or not.

michael_michael• 8 months ago

Assuming we take the statement "more free market equals more efficient outcome" as always and absolutely true, it raises the question: Are the healthcare-related needs of a society aligned with the most efficient outcome that a free market can deliver? I don't think they necessarily are.

paddleon• 8 months ago

Could you please define "efficient"?

and also "free market"?

oh, and just for fun, also define "outcome"

LorenPechtel5• 8 months ago

1) Some people have more expensive problems than others. The average person can't realistically budget for big things.

2) The "efficient" option is to let the big problems die.

siliconc0w• 8 months ago

The problems and solutions are all well documented. Like the article mentions, there are many existence proofs of cheaper more effective systems. The real problem is the legalized bribery that prevents any action and the current media environment that pushes people to consume partisan rage slop so we don't hold mediocre politicians accountable.

waffletower• 8 months ago

Taken together, as Andrew Tsang (too) beautifully depicts, the United States Healthcare system is arguably the largest bureaucracy on planet Earth. Larger in employees and collective spending than any effective bureaucracies in India or China.

LorenPechtel5• 8 months ago

This chart breaks it down by spending, it does nothing about determining the effectiveness of said spending. How much actual care per $ spent?

I've been on a mock jury for a personal injury lawsuit--and it was obvious to a couple of us that the smoking gun presented by the defense clearly showed she was running up the bill on something minor. We were pointing out the problem--did that sway the majority? No. The general opinion seemed to be she was owed something for what had happened--and they had failed on the voir dire, they asked about my background, didn't ask anything about family. Oops--I knew it would end up all going to the lawyer and doctors, nothing to her (the proposed amount was less than the bills she had run up.) I played it fair and didn't speak up about what would happen.

And all the national systems have a fox guarding the henhouse problem. Provide proper treatment for the expensive stuff or lower the standards? So long as you make a sufficient portion of the electorate think you're doing a good job the reality is the standards get lowered. And cook the books in pretending it's fair. (Two examples that come to mind: Including "fairness" in the measure of health system quality--automatic selection for UHC, and comparing infant mortality (they admitted the comparison was not valid, did it anyway.) The reality is the biggest "cause" of infant mortality in the developed world is how the medical world falls on the stillbirth/infant mortality line. Even elsewhere--Cuba gets it's good infant mortality numbers by setting a minimum birth weight. The ones that were born too early and never had a chance get classed as stillbirths.)

HDThoreaun4• 8 months ago

Over litigation of medical malpractice is a huge problem in this country and is a large contributor to why our system is so expensive. Medical malpractice juries should not be made up of people who have no idea how medicine works.

LorenPechtel5• 8 months ago

Yeah. Jury of your peers is fine for non-technical matters, but an awful lot of cases are technical. I would like to see a profession "juror" that requires a broad science education--enough that it doesn't come down to whose "expert" is better at making it believable. And for cases involving licenses make some of it people qualified to hold the license. (And the lawyers would hate that. They go ape over supposed lack of liability with vaccines--no, it goes before medically trained people. And locally there used to be a malpractice review board--three? doctors, three? lawyers. All malpractice cases must be presented to it first--non-binding but your chances in court were pretty slim if you did get a majority from the review board. The lawyers really loved destroying that.)

purplezooey• 8 months ago

The author says, "The operational resistance alone would be too much." True. But we need to continue reforms that clearly will improve the system. That effort seems to be stuck as we instead pause to relitigate the advances of the second half of the twentieth century. These would go a long way: mandate price transparancy, decouple insurance from employment, let Medicare negotiate prices broadly, and ban PBMs.

robocat• 8 months ago

Another choice we made without admitting it: we socialize the costs of aging, but only after families go broke first.

We effectively do the same in New Zealand even though our healthcare system is very similar to the NHS. Once you go into state funded nursing, then you can keep NZ$284,636 of assets (if unmarried) and NZ$56 per week of any income. Median house price is NZ$770,000 so individuals often are forced to sell their home.

So effectively bankrupted although not quite $0.

kalap_ur• 8 months ago

I think this analysis has little to say. What would be important to know how those $ are being spent, not where they are collected from. We do not know how those $ are being spent.

1. Doctors, Nurses, Administration (management and field administration), other. We need to know total employment and total salaries (including private practices).

2. OTC, prescription and hospital administered drugs (separated for acute, such as ER, and chronic, such as inpatient and elective surgery). We need to know how much is being spent on these, which is _potentially_ one of the culprits of large discrepancy between US healthcare vs European healthcare. What would be great to have these by large cohorts of population (<20; 20-65; 66-85; 85<) and maybe the top 5 buckets (i am guessing: cardiovascular - chronic; diabetes; accidents; hospice; dialysis)

3. Facility expenses (rent, maintenance, utilities, other contractor)

4. Other

Without these, very hard to opine reasonably on the state of affairs. And to be fair, I suspect there is a reason why proper expense breakdowns are not available.

Mapping the US healthcare system’s financial flows

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