It would also be nice to reform the FDA and the clinical trial system: https://bessstillman.substack.com/p/please-be-dying-but-not-...
"Antitrust litigation" covers this, but to spell it out, the increasing monopolization of many local healthcare systems is a huge problem.
In defense of the FDA, which I promise is not an instituion I have much affection for, they are asked to strike an impossible balance. More or less the same regulatory impulse that allowed Richard Sackler to build an empire on the killing of millions of americans is the same one that allows very sick people to access very, at times dubious, drugs and trials that sometimes save their lives.
Most of medicine is very centrally built around the "first do no harm" approach, even at the cost of lives by non-intervention sometimes. With the FDA most people want a "do so harm some of the time for the greater good" approach which is a really difficult thing for a federal agency to put into practice. I think they do an especially awful job with it but I appreaciate that it is a really hard balance to strike.
The Sacklers aren’t the problem here, corruption is.
Why not both?
People aren’t dying very young with tobacco addiction for the most part. There is cancer in youth sure , but tobacco is not the leading cause of that .
People who die of tobacco related illnesses are functioning adults and contributing members of society for the vast majority of their lives .
The disruption to the lives of drug addicts and their friends and family far exceeds those faced by tobacco addicts.
Not everything is a conspiracy or corruption people only react to what they see, the impact of drugs is far more visceral and immediate than tobacco or say obesity which kills even more, so pressure for legislation is higher
If tobacco killed because the of one wrongly cut cigarette you smoked , it would require prescription too
The regulation is a function of that, not how many people are killed by one item or other, it is merely just how easy is it die of OD with a poorly sourced drug, is why we have FDA and regulations etc is my point.
The FDA doesn't have jurisdiction over "many things".
I personally think the FDA shouldn't exist, or should not have power to regulate (and should be a toothless advisory/certification authority). That said, if they are to exist, they should do their job. They're not. We're paying the bill but not getting the service.
Same goes with OSHA. Every casino in Las Vegas demands their employees work in rooms filled with tobacco smoke. Why? Money. It's pure corruption.
We have the rules, they're just not enforced, because if you have enough cash flow, you get a special carve-out so that the rules that apply to everyone else don't apply to you.
Big Tobacco gets it from the FDA. Big Telecom gets it from the FCC. Boeing gets it from the FAA. It's everywhere, and once you see it, you can't unsee it. We're paying billions and billions for these huge bureaucracies and they're only pretending to provide us with the service they exist to provide.
The FDA has jurisdiction over tobacco[2] and various food products contributing to obesity and those are the only two examples highlighted by OP or me in the thread.
> We're paying the bill but not getting the service.
Don't think we are, there is very little money for Food part of FDA, in the last 5-6 years the money for food has gone from 1,037M(2018) to 1,145(2022)[1] which in real terms considering inflation means it has gone down and last 30 years it has been similar story.
Last Week Tonight had a recent in depth segment on how little resource we have for food enforcement[3] sometimes as little as singe digit inspectors for an entire industry.
We don't really enforce food regulations, because we don't fund the regulatory body for food safety.
[1] https://crsreports.congress.gov/product/pdf/R/R44576, compare that Drugs moved from 1,330 to 2,116M in the same time period.
How much are regulations to blame for this mess? ie if we cut regulation, would that lead to lower cost and better outcomes?
What is the path to fix this?
The heart of the question comes back to what you actually want to fix. I don't know you. A lot of people would just like to pay less for the thing they currently receive which is a nice sentiment but often hard to resolve. A large set of those people are actually upset because they have been led to believe they are paying a lot more than other people for the same thing, which I do not believe to be actually true.
One solution that does seem palatable to a lot of people, not me, but a lot, is "I would like like to appear to pay less for what I receive while the real costs are hidden and subsidized in a way that is much less visible to me". While popular this view is not popular enough to adopt legislation to that effect.
In practical terms detailed policy legislation that makes losers out of a lot of low value transactional middle men would see some very meaningful across the board cost reductions, probably 7-10% (500 billion or more). Top of that list would be intelligent standardization and regulation of transactional medical billing process. This would/could look a little bit like how we regulate banking between financial institutions. Very sexy I know.
The current system is a tragedy of the commons. Costs are opaque and distributed. Patients have insurance and may as well buy the most expensive treatment (everybody else is doing it). There is nobody in the entire health system with incentives to trade 1% less benefit for 99% cost reduction.
In Europe, this is often handled by government purchasing discretion (not price caps as many simplistically believe). If X treatment is too expensive, it simply isnt covered. If generics medication get 99% of the job done, that is what you get.
This might mean replacing employee healthcarecare with employee payments, MORE copays, and more transparent pricing (there has already been some improvement in this area).
If a CT cost is 10x at one hospital, and 1x at the other, the patient needs an incentive to seek out the 1X cost. Similar, if one cancer drug is 10k and the other 100k, with a life extension of X days, the patient is the only one that can really make the call.
But then the patient can go to whichever provider they want. The one across the street from you charges $3000 more than the one which is a two hour drive away? It's your $3000 and it's your two hours each way.
You might even find a provider that charges less than your insurance pays, and then you could put the balance in your HSA for the next time it isn't.
We keep trying to pretend that some important price negotiation is happening between bureaucracies that has to be preserved, but a CT scan for example is a standard service. If the prices had to be published and put in a database where patients can see them, you don't need anyone to negotiate anything, people would just choose the one with the best price absent some specific reason to do otherwise, which would exert a downward pressure on prices that doesn't currently exist.
The amount of times I’ve proposed this only to be responded with “government death panels” is astounding.
> If a CT cost is 10x at one hospital, and 1x at the other, the patient needs an incentive to seek out the 1X cost.
Healthcare is weird because the demand is inelastic and you aren’t always in a place to price shop. However, I agree with your broader point.
Similarly, I think most people vastly overestimate how much of Healthcare expenses involves an ambulance ride or emergency room
Medical coding being different between every system, seems like the mechanism used to negotiate prices. Is that correct? Would standardizing on the VA medical coding[1] help, or just force the problem onto doctors to change their coding.
[1] One person told me the VA system was good.
Less regulation can solve competition problems. Is this the USA problem? I don't know.
What are your thoughts on how effective something like Medicare for all would be?
Interesting points. The Economist is great (so long as you read it with an eye open for their normal media bias).
Nitpick:
> In almost no other countries do you need a prescription for eyeglasses.
In New Zealand the eye details from your optician are called a prescription. Opticians and eyewear is mostly paid for privately (except people on government benefits and children get theirs paid for by the public). I'm not sure if private insurance offers a glass coverage option.
Mostly, this article is pointing out emergent behaviours of a set of rules. How can we design self-optimising economic systems that are better than capitalism & democracy?
It's really not. If you asked the same question about Russia and their oil economy and oligarchs it would be perfectly reasonable despite the size.
And yet pretty much every single one of those is more equitable and efficient than what US can muster.
US, for better or worse, is much more individualistic society, without much emotions for plight of other citizens. Sort of buddhistic/hinduistic approach - if you suffer now, you must have done terrible things in your past life to deserve it, and why should I interfere.
This results in tons of wonderful things in economy but messes up quite a bit too and brings some bad incentives where they shouldn't be. You don't want to be below average/median income (and say have some health issues on top of that), the quality of life is significantly worse than similarly-positioned peers in say Western Europe. But everybody looks at the top 0.1%, which fares, at least financially better.
Strange place and setup for me and not in a good way, but maybe our more egalitarian and friendly/helpful approach is too naive and harsher society is more robust. We shall see.
Let's be fair it's at the very least 10% (maybe up to 30-40% if not more) that are doing better financially than they would in Europe under similar circumstances (education, career etc. wise). In certain sectors like tech it's not even close.
e.g. real estate even in SF, NY, San Jose is significantly cheaper than for instance in Munich, Rome, Paris, Milan, London etc. when compared to median income.
Also it's not that obvious to me that Americans are that much less likely to care about 'the plight' of others on an individual level. For instances Americans donate many times more to charity on average than Europeans do (which makes sense if you expect the government to take care of everyone, but let's not equate that with intervening directly...)
You are just hiding in complexities of real life and reducing it into few trivial numbers that are easy to compare. Count in good education for say 2 kids (500k-1 million per head?) which is free here, count in healthcare costs if you live long enough to start accumulating health problems that are basically unsolvable by today's medicine. Free here.
I don't know the actual numbers, and they are very individual so what you say may be actually true for you, but it certainly isn't true for me for example. Also, personal freedom is higher in Western Europe (debatable, but for me what I define as personal freedom is severely lacking in US). High criminality. Basically police state. Effectively a caste society based on your wealth/income. Your taxes sometimes pay for killing innocent poor people half around the world (true for few european states too, but definitely not mine). And so on. But its nigh impossible to put some simple numbers on those things we generally call quality of life.
That seems like a very high number. There are very expensive private schools in Europe too if you chose to send your children there.
> healthcare costs
Yes, it depends on your income and insurance. The fact that it's tied to your job is a huge issue if you develop serious health problems and are unable to work. But that "only" applies to a subset of the population and being able to save an extra $30-100k per year might still provide a form of "insurance" and if not you'll end up being significantly richer than your European counterparts when your retire (assuming you're in the top 20% or so).
> Also, personal freedom is higher in Western Europe > Basically police state
Can you give some examples? I mean the proposed EU wide encryption ban could pretty much turn the EU into East Germany with universal state surveillance (obviously an exaggeration and hopefully it will never pass but the fact that some EU bureaucrats are even considering it and that some states actually support the proposal should be extremely shocking to everyone who cares about "personal freedom" even the tiniest bit).
> Effectively a caste society based on your wealth/income.
Considering how expensive real estate is these days and that a significant proportion (most?) of wealth is inherited I'm not sure that's particularly different in the EU.
> High criminality
Definitely true, although it largely depends on where you live. Some areas are pretty much as safe as anywhere in Europe.
> But its nigh impossible to put some simple numbers on those things we generally call quality of life. > You are just hiding in complexities
Yes, however you can't expect me to provide you with an in-depth analysis here it's just one example. It largely depends on many factors, however Europe is not some fairyland. Some things are better than in the US, some are just as bad or worse; median income, youth unemployment, unaffordable real estate, wealth inequality etc.).
IMHO the biggest issue Europe is facing is widespread economic stagnation over the last 10-15 year that combined with aging population might mean that "free"* healthcare and other social services might soon become unaffordable (in this context I find the slight superiority complex exhibited by some Europeans slightly baffling)
* it's not really free though. You still pay ~10% in taxes for it and many countries have mostly (or entirely) privatized healthcare systems (even if they are much better regulated than those in the US)
- there is a big debate if doctors should serve 24 hours without break (non stop) in hospital.
- doctors may be forced to operate after 24 hours of non stop work. I know for fact anesthesiologist who did so. We have VERY strict regulations for truck drivers to only drive 8 hours per day...
- there are no basic medications in pharmacy, like penicillin or anti fever sirup for kids
- you pay 8% medical income tax (it is called insurance), but there is no chance to find dentist or GP. So you go private an pay it out of pocket
- no chance to sue doctor or hospital for mistreatment. I could tell stories about tampons and tools forgotten inside patient...
- we have highest numbers of doctors per capita in Europe, yet system is very inefficient
- doctors spend about 40% of their time with paperwork
- base salary for doctor (without overtimes) is very low, they would not even qualify for mortgage..
- once I waited 12 hours at emergency room in public hospital (with life threatening condition), at end I gave up, and went to private clinic. I took second job to pay it...
It may be the EU, but why not use a more comparable country?
How so? GDP per capita:
Germany, $52k
EU avg, $40k
Czechia, $30k
This is pointless. Go tell someone who’s been there with a straight face that Czechia is basically like Florida or Michigan. Have a good weekend.
> Before war Russia had GDP
Well.. Russia had 2.3 times higher population than Italy so it's not particularly surprising. Also it wasn't really that poor compared to most other EE countries (about on par with the Baltic states prior to 2014).
Compared to the median EU country Czechia is basically like Florida or Michigan (e.g. it's GDP per capita is closer to that of the Netherlands the Michigan's is to Massachusetts etc.).
> Go tell someone who’s been there with a straight face that Czechia
The problem is that the EU is significantly poorer on the whole.
> It seems to squarely fall within the provided exception.
I don't agree.
> This is pointless.
I'm really not quite sure what are you trying to say. Economically only Switzerland, Norway and Ireland(*) really have a higher GDP per capita than the US only one of them is even in the EU. Denmark, Netherlands and Sweden (only 39 mil people in total) are not that far off, so are we supposed to ignore all the other countries in the EU because of that?
This is literally what we've been doing for years. It doesn't work because we're trying to apply bandaids to a problem of fundamental rot within our healthcare system. Look at how many states and politicians blew up over the ACA and attempted to stonewall it. I'm old enough to remember my mother being denied healthcare by her insurance provider because she had a stroke and that counted as a preexisting condition. Our solution to this rot is trying to solve a problem after it occurs, rather than prevent it in the first place.
True, Europe does not have one healthcare system. And yet, thanks to the EHIC (European Health Insurance Card) [0], citizens of the 27 countries in the EU, Switzerland, the UK, and the EEA (Iceland, Liechtenstein and Norway), can use the healthcare systems from any other of the 31/28 [1] participant countries if they need healthcare on a temporary visit under the same conditions as the local resident citizens. The expenses incurred are reimbursed to the system providing the healthcare by the healthcare system of the citizen who is receiving it. This is done transparently to the patient, all they need to do is provide their EHIC card.
This means that each of these 32 different healthcare systems, with their own particularities (e.g. free at the point of use vs. copay), can be considered one single universal healthcare system.
If 32 different countries, with their own legal systems, legislation, languages, and healthcare system design (insurance based or state funded) can cover approximately 500 million citizens, then 50 US states under one single federal government should have no problem doing the same for their 333 million citizens.
[0] https://en.wikipedia.org/wiki/European_Health_Insurance_Card
[1] In the case of the UK, the EHIC only reciprocal with EU and Switzerland, not the EEA.
https://ec.europa.eu/social/main.jsp?catId=1021&langId=en&in...
If you work less than that, the accident insurance premium is not that high(less than 50 CHF per month).
Is this the correct book? And where’s the best place to buy it. https://www.amazon.com/Hacking-Healthcare-Standards-Workflow...
This may be correct to say in the de jure sense, but in the de facto sense there is a set of common norms and characteristics across all of them that makes it possible to talk and reason about them as a "system" overall (especially when talking about Federal-level policies that have potential to create nationwide changes to how Americans experience that "system", e.g. as the ACA did in a few ways).
This is a fact that people, non-US but also many US Americans ourselves, have a really hard time in understanding. The vast majority of laws are left to the states. It's just incredibly hard to get national laws, and as a consequence, we have relatively few national laws. For example, there isn't a national standard for murder, there are 50+. Well, there is one if you commit the murder in a post office, but outside the post office, you're in the other 50 definitions.
It's a miracle even the half-baked ACA got passed in this context.
Federal law trumps state law. And, in fact, we do have 3 national healthcare implementations, Medicare, Medicaid, and Vertaren Affairs healthcare.
Socializing healthcare could be done easily under the commerce clause of the constitution, but that doesn't happen because it's not popular among elected officials (it's only popular among the most progressive Democrats, for everyone else it's a no).
ACA was so half baked and all over the board because there was a lot of carve outs to win over centrist Democrats. A much simpler "Medicare for all" could be implemented simply by changing the Medicare statute's enrollment age to 0.
The reason national laws are so hard is the filibuster in the Senate and the fact that Republicans are pretty much universally opposed to expanding government healthcare. It's got nothing to do with there being 50 states.
Also this is slightly pedantic, but your examples are NOT national health systems. The closest thing in the U.S. is military medicine, which is (mostly) federally funded with doctors working for and paid by the government.
Not really. The comment I was responding to argued there couldn't be a national healthcare system in the US. I wasn't arguing that those systems are perfect.
> The reforms needed are much, much more than simply setting Medicare’s enrollment age to 0
Agree
> especially with the thousands of pages of weird exclusions and conditions enshrined into Medicare over the years.
I agree to an extent. The thing is, healthcare is messy regardless. I simply could not imagine any healthcare payment system that wasn't fairly complex to code out.
> Also this is slightly pedantic, but your examples are NOT national health systems. The closest thing in the U.S. is military medicine, which is (mostly) federally funded with doctors working for and paid by the government.
Agree, and honestly if I had my way I'd nationalize healthcare top to bottom. Capitalism is a race to the bottom with healthcare. There's no real incentive to produce quality (you have a captured market). That incentive is to raise prices as high as possible and cut staff as lean as possible.
That is an strange and reactionary misconstruction. My whole comment was talking about the misunderstanding of US Federalism. Healthcare was a flippant comment as an example in the closing sentence.
Where do I dispute that?
> The reason national laws are so hard is the filibuster in the Senate and the fact that Republicans are pretty much universally opposed to expanding government healthcare. It's got nothing to do with there being 50 states.
That's a very narrow historical view. Look at any landmark laws passed that have significance on an average person's life - ACA, 2008 Bank Bailout, Patriot Act, AWB. They are few and far between compared to other Western democracies.
I probably read too much into your earlier comment, but it seemed like your discussion of state laws meant national ones would be harder to pass.
To the rest of your comment.
Federal laws have been historically a lot easier to pass, the gridlock of DC is (semi) recent history that started around the 90s.
Regan kicked the Republicans down a path of deregulation and privatization of the gov. Bush Srs loss from "no new taxes" started the "never compromise" attitude of Republicans. Newt Gingrich codified that under Clinton. And with Obama we saw basically the end of any sort of major across the isle legislation.
I don't know why you are saying this is a narrow view. From roughly Eisenhower to Regan, major federal laws were fairly common. national highways, NLRB, social security, Medicare, EPA, CCC, OSHA, various federal law enforcement, etc. These all have pretty high impacts on day to day life.
Many people in the US seem to still think that they will be way more screwed if they leave their job than they actually would be.
Have you tried? I did, when between jobs. Over $3000/month for a family of three.
It's a relatively old analysis (2009), but McKinsey did some research that I think highlights some pretty important differences in the US healthcare system that actually points to where the money is going.
https://www.mckinsey.com/~/media/mckinsey/dotcom/client_serv...
If you look at Exhibit 2, page 4, they basically compare US spending, as a percentage of GDP, and breaks down the difference between price and volume. The result are some very interesting facts that run counter to common belief:
- health administration and insurance is a tiny contribution to high costs, accounting for about 5% of excess spending
- spending on pharmaceuticals and "non-durable" (supplies) is pretty small and only contributes to 5% of excess spending
- in-patient care (where the patient stays in the hospital overnight) spending is only 10% higher than the OECD average relative to GDP
- 68% of the higher spending is out-patient care (where the patient doesn't stay in the hospital overnight); price is a factor here, but in reality, Americans get way more out-patient procedures than other countries
In both Australia and France, you need a prescription. This assertion makes me question the accuracy of the rest of your comment.
These are not accidents though.
For example in Puerto Rico there was a good, affordable public health care system many decades ago (El plan Arbona). This was meticulously dismantled by the insurance industry through political lobbying and support of insurance-friendly politicians. Now they have the same debacle as in the US, sky high insurance profits and terrible health care. This was very intentional, not an accident of history.
The insurance companies dismantling a good public system was a pretty recent action, mostly in the 90s although the damage has taken a while to propagate.
The US doesn't have one healthcare system, it has 50+ (or 51, ...59, is healthcare in Puerto Rico part of the US healthcare system?, how about American Samoa?). Contrary to many peoples opinions the "healthcare system" is not operated or overseen primarily at a federal level. The federal government is one of the largest buyers of healthcare as an insurance provider, that is true.
Comparisons to other countries that are much much smaller than the US are sort of silly to me. Europe does not have one healthcare system. Subsidized education and price controls in foreign systems also make comparisons excruciating. I think it is usually a canard. OECD data is, in a word, "garbage", as it relates to healthcare. Just one example: In the US, eyewear for seeing purposes is healthcare. In almost no other countries do you need a prescription for eyeglasses. Prescription eyewear in the US is a 20-30 billion dollar market, depending on how you want to count it.
I think the mechanisms for paying for healthcare in the US are really inefficient and involve too many intermediaries. This is a result of a lot of accidents of history. America is a very physically large country with a lot of people all over it, we expect very high standards of care, we consume a tremendous amount of pharmaceuticals, we have wildy abundant and relatively inexpensive food that seems to be correlated to our being much more overweight than a lot of other peoples, we engage in a lot of dangerous activities at a rate that far exceeds what a lot of other peoples do that seems to correlated with our culture, on and on.
Instead of hand wringing about differences between ourselves and other cultures we would be better served looking at boring things like medicares 3 million pages of medical claim guidelines, clearing house operations and conflicts of interest, better incentives for state level responsibility, antitrust litigation, lots of practical things that don't make click bait headlines.