I had a kidney stone, and had to be transferred from Hospital A to Hospital B for a procedure, as A didn't have a urologist available.
I was transported by ambulance.
At the destination hospital, a transporter (person with a gurney) was waiting at the ambulance bay and I was moved from ambulance gurney to hospital gurney and wheeled into surgery. I did not go through registration or admission in the ER. I did not speak to a provider in the ER. I was not put in a room, nor was a room allocated for me. But because the physical transfer happened (in the -hallway-, mind you) of the ER, they tried to bill my insurance for a $3,800 ER incident, on top of the OR and procedure costs.
Because you do not have to go to those places.
Years ago, when I was a kid, I heard my parents, uncles and aunts have a big discussion while I was in bed.
They were talking about the trend of For Profit Health Care, the outcome they came up with was prices will eventually raise up to extortion levels, why, because that is what everyone needs.
So here we are, being extorted by insurance and equity firms. And many Doctors are in the same boat with us, they are being squeezed with insurance costs and bureaucracy. My Dr has to have 3 people working in the office just to deal with health Insurance.
As a kid, it use to be 1 nurse and the nurse would deal wit paper work and help the Dr when needed. Plus their insurance costs were low compared to now.
They’d send checks 6months late and often miss them. They also forced certain prices for him to stay “in-network”
Insurances don’t seem to help anyone.
For example, with my parent’s independent office, people would come in without insurance and unable to pay the high fees for say a filling or a crown.
My parents were technically able to charge much lower prices (more than half off in the case of normal cleanings,) but were unable to because of the contract they had with their insurance network.
Moreover, the listed price mandated by the insurance was not the same as the payout my parents received after filling the claim. (The payout was always less. Sometimes much less than the mandated price)
I don’t see who benefits in this situation besides the insurance company.
Even if my employer pays for my insurance, I still need to meet some premium most of the time. And what I pay is inflated because of the in-network contracts
Consider also that, in the states at least, dental insurance is separate from medical.
Restaurants, yes. But supermarkets and car mechanics? Everyone has to eat, and everyone who has a car has to get it fixed sometimes. In fact, people need to eat much more often than they need health care--yet supermarkets are somehow able to provide a wide selection of food at reasonable prices. The same could be done for health care if it were a competitive free market instead of being regulated so heavily.
I realize this isn't what you meant, but some people have gardens to supplement their food supply and some people repair their own car. I'm not a car owner, but I do repair my own bike and the reason for it is that the required parts and tools are usually much less expensive than a one-time repair (with the biggest expense, tools, being spread across multiple repairs).
As for the regulation of health care, it exists for a reason. Some of those reasons are for the public good. You only need to look at alternative medicine to understand that there are a lot of snake oils salesmen out there. Letting people portray themselves as legitimate doctors would only muddy the water. Then there are factors such as competence. It is difficult enough to deal with in a regulated system, never mind an unregulated one.
One can argue that there are valid reasons to regulate health care. But, as I pointed out elsewhere in this discussion, similar reasons exist to regulate food, and we do regulate food for those reasons, but that doesn't prevent us from having free market competition in food suppliers.
Basically no one in the First World grows enough calories in their garden to make a significant difference, and repairing your own car nowadays generally requires buying lots of expen$ive test equipment. The days of the shade tree mechanic are sadly long over.
You do if you want to get food and don't grow everything yourself?
Everyone has to eat, so everyone except a small number of farmers does have to go to either restaurants or markets.
You don't need to go to college either but prices for that have gone up more than 10x. If anything, I can skip going to the doctor for a very long time because of cost (and people do unfortunately).
> They were talking about the trend of For Profit Health Care, the outcome they came up with was prices will eventually raise up to extortion levels, why, because that is what everyone needs.
Healthcare has always been for profit.
I can only speak for what's happened in the US and have no experience with colleges elsewhere.
It's a case of well-intentioned (in their context) people from each political side that made this mess collectively.
You can get food without going to a restaurant. You cannot get healthcare without going to a doctor.
But further, medicine has extremely low competition at all levels. There are few companies producing penicillin, you likely don't have a lot of options for hospital care (especially if you need a specialist), and your insurance was likely not something you picked.
Compare that to food, where you can get it from multiple grocery stores, gas stations, or even order it online. If you are in a place with 1 restaurant it's highly likely there are 10 competing restaurants. Heck, if you have some land you can even grow your own food in a garden.
Medicine is a necessity with few providers which makes it a particularly bad fit for capitalism. It can't be made cheaper or more available by cutting regulations. They are necessary to keep the industry from killing people.
But not unlike supermarkets, which were also mentioned.
> Medicine is a necessity with few providers which makes it a particularly bad fit for capitalism
Medicine does not have few providers because of "capitalism". It has few providers because of regulation that artificially limits the supply of providers. In a free market, the market would provide whatever supply of providers is needed to meet people's health care needs in the most efficient way. But regulation prevents that from happening.
> They are necessary to keep the industry from killing people.
Yet somehow we manage to have regulations to prevent food from killing people, without restricting the supply of supermarkets, and without impairing competition among them. We could do the same for health care.
The cost of health care is kind of… a×b+c×d, except more complicated, where a is the hourly cost of a physician, b is the number of times you get an hour's care, c is the cost of a pill and d is the number of pills you get. Want the total sum to decrease? Then pick which one of a, b, c and d you want to decrease, and look at whether competition can help. A lot of this thread sounds like just "private equity is evil and therefore guilty", nothing to do with goal-directed efficacy.
We already know the answer to this: competition can help decrease a and c, and even b and d might be fair game since competition in preventive care and preventive information can increase its effectiveness, which in turn reduces people's overall need for health care.
I would say medicine has few providers because of -
1. economies of scale for medication - meaning a Bayer selling 10 million motrin/ibuprofen can undercut LocalPharma if they tried to comptete - and 1
2. because of more complex factors for docs/nurses, possibly regulations but also difficult and poorly structured studies/residencies & poor market structure.
> Yet somehow we manage to have regulations to prevent food from killing people, without restricting the supply of supermarkets, and without impairing competition among them. We could do the same for health care.
It is probably possible for a half-competent person to run a mom and pop store with just a few thousand dollars of revenue, and maybe 2-3 months (maybe less if you have your own farm). Even a small medical setup like a dentist's clinic or a doctor's office needs years more of expensive education plus possibly trained staff (technicians/nurses etc).
The entry of barrier to healthcare is extremely high. However unlike how you can just go to a different store if you don't like the prices in one place, in medicine if a drug is made by 1 company and it costs $$$ you don't have many options. You can substitute tomatoes for potatoes but can't with meds.
There are a lot of fields where free markets with minimal/no regulations are very helpful, but medicine is not one of them.
while I can also steal medicine, I don't have the expertise as a doctor or pharmacist, so I'm limited to self-diagnosis and pre-packaged medicines.
Food is an extreme need, and while there are many types of businesses that provide food, we can wrap those up into one larger class of food provider businesses and ask why they aren't being captured and squeezed. Sure, some are to hunt or garden, but that number is far too small when you think of places with the highest concentrations of people. Food even has regulations, but it manages to not lead to monopolies that can charge whatever they want because if the price goes too high, other players can jump through the hoops to enter the market. The regulation on healthcare has reached the point of a stranglehold.
The point is that when you need food, you can go to any number of places to get it. So going to any one specific place is not a requirement.
Compare that to healthcare. I get in an accident or call an ambulance. I don't get a choice where I go or who I see. I just go to wherever is nearest or has availability and hope that it's either not bad enough to justify me needing to go somewhere else or that I have the ability to be transferred to the location of my choice (at great cost).
A more mild example are diseases like cancer. You'll have some more freedom on which place you go to but oncology is extremely diverse and specialised. Unless you get really lucky, odds are there's only a specific handful of doctors within a several hours drive of you that actually have a good idea of how to treat your specific cancer under the specific conditions you have it. So you go to whichever one of them can see you in a reasonable amount of time because otherwise you die. The same goes for many of the complex diseases people spend months or years diagnosing because they are so hard to pin down.
And that's discussing situations where time is of the essence and you get very little choice in your options. And those tend to be the most expensive.
There's plenty of other aspects of healthcare that are far cheaper of course and could be likened to the grocery store examples but drawing the regulatory line between the two is near impossible given the fuzzy nature of healthcare and medical science.
Medical care also often involves crisis situations where you absolutely need care right now so you don't have much leverage. On the other hand, most of the time people have some flexibility in how much they eat, when they eat, and what they eat.
There are about six supermarket chaions in the city where I live. Most people will struggle to guess which ones are owned by private equity (one isn't), but almost everyone can name at least a couple of hospitals that aren't.
It may seem unreal to you, but I can assure you that it actually happened at one point. It was a duopoly.
The history of Central America is essentially the history of these companies. Looking into it will give you more "understanding of the world" than you probably think.
It wouldn't be if the supply of health care were not artificially restricted by regulation.
> Medical care also often involves crisis situations
No, medical care sometimes involves crisis situations. But much more often it doesn't. A sane health care system would treat these two cases very differently. Care for crisis situations would be handled by insurance because that's what insurance is for: unexpected situations that you can't pay for out of pocket. But routine care would not. However, our system is not sane, and insists on bundling these two things together when that makes no sense.
They are. Maybe not by PE, but capitalism finds a way. This isn't the first time either the two big grocery chains in Canada have a long history of exploiting market dominance to screw over people who want to eat.
https://www.ctvnews.ca/business/competition-bureau-probes-al...
Healthcare doesn't really work in a capitalistic marketplace.
No, it isn't. People make all kinds of tradeoffs that place a finite value on their lives.
What skews the health care market is that people do not see the actual cost of what they are getting; they only see a small fraction of that cost. So their demand is way out of proportion to the actual supply of health care. Further, because they can't see the actual costs, patients have no idea whether the health care they are getting is actually worth what they cost. (The lack of transparency about the actual effectiveness of health care doesn't help either.)
> Healthcare doesn't really work in a capitalistic marketplace
No, health care doesn't really work in a regulated marketplace where people are not given the information they need to make accurate judgments about what health care is worth its cost.
If you have to split a dinner bill with a million people no matter if or what you order, people will gravitate to the surf and turff. It's the simple answer to the prisoner's dilemma when you have a million players.
The problem is, you cannot calculate costs for unknowns. You go to a doctor for a small thing, which blows up into a big thing. Those big things are the majority of the cost. Or you go to a hospital for a small issue, which ended up being a critical unknown. No matter how much people wax poetic about healthcare and regulations, it's ultimately a system where you cannot predict costs accurately. People want to treat it like planning a flight, when it's more like your car breaking down or your phone dying suddenly.
anyone who has resources and is rational will use those resources above everything else to stay alive.
it's our biological imperative.
people have addictions and mental disorders but theres very few things someone rational would trade their life for.
that's the Crux of your argument so I don't find the rest of your argument compelling.
especially looking at data comparing healthcare cost and outcomes in first world countries. 79 Now you might be right about regulation because from what I've read most of that increase cost in comparison to other countries is from administration which implies regulation.
but another solution to that is socialized healthcare.
Same with housing. Demand is increasing faster than supply hence price increases.
Price increases make housing a great financial instrument due to ease of getting mortgage loans.
Also why we need to have a sane immigration strategy. Can’t bring in too many people too fast (like Canada)
Private equity is playing cards on the arbitrage that any asset that increases in demand much faster than supply, and can be loan leveraged is a great investment.
But most things people have a price ceiling they're willing to pay.
Health care there is no price people won't pay for their lives, so the demand ceiling is essentially the entire net worth of the entire population
What do you mean? I do absolutely need to go to grocery stores. I would starve otherwise?
Weren’t not talking about insurance networks. We’re talking about how healthcare can’t be free market.
Insurance networks aren’t a requirement of a free market. There are private healthcare systems that don’t have networks.
But insurance networks aren't a requirement of free markets. So your argument that in today's system (only one form of a free market for healthcare) proves free markets don't work is ignoring alternatives.
It sounds like you actually would have plenty of physicians to choose from, just like when you buy food.
You can't get get a second hand operation or medicine.
You can even look at less regulated medication, like pet meds, and see how much cheaper some are. We don't need to go that far, just like how people food is more regulated than pet food, but without being as regulated as our current market for healthcare.
Much of medicine is vastly more complex than something like food safety or clothing safety.
No, because when your tooth hurts now, or you're bleeding now, or you need to get vaccinated to avoid you getting hepatitis, there's very little choice in the matter.
Healthcare is a fundamentally inelastic good. A dangerous one too, because bad quality healthcare can literally kill people. Inaccessibility of healthcare kills people too.
Look, there is no need to reinvent the wheel here. The US can look into any other developed country on the planet for inspiration. Every single one of them has a better, more accessible, cheaper for everyone involved, usually more or at least differently regulated, with better outcomes, model.
> No Way to Prevent This,' Says Only Nation Where This Regularly Happens
The vaccines are also a particular bad example. (The typical Now-lecture example is of emergency room care).
Food (despite recent inflation) is still very cheap in the grand scheme of things, despite it being something ABSOLUTELY NECESSARY for survival.
The health insurance profit margin is around 3.3%. Maybe they're just bad at extortion
There are certain topics people feel very strongly about with no insight or experience, they say things that are demonstrably false and refuse to look at it objectively. Unfortunately US healthcare is one of those
https://content.naic.org/sites/default/files/inline-files/he...
Basically, you mark up the little stuff that everything is built on ($1/page for copies, for example) so the margins look smaller when you get to anything substantial. So 3.3% is a meaningless number until it has been audited all the way down to the smallest purchases.
The question is why can't I provide insurance at the market price and just bring in efficiencies to get my cost down and margin up?
The reason is that it's not a real market through onerous regulations. People are forced to buy it, new entrants aren't allowed and there is an implicit threat that if margins get big politicians will come after you. So were stuck in this crappy system
Housing? Yep mortgages, people can rarely afford a house without a large mortgage
Cars? Yep, most cars are bought on finance, people couldn’t buy new cars without the finance.
Health? In the us, insurance companies provide the finance.
I really wish society would have stopped this in its tracks.
Private equity, sure, but also the inflated cost of construction materials, realtor and land lord collusion, automated rent fixing, incentives for landlords to keep empty units rather than budge on rent.
It’s a big mess
I know lots of people who would be dead without medical care.
Instead they are making lots of doctors appointments, and buying lots of drugs.
What credit do insurance companies provide? You pay them and they pay the doctor based on some negotiated rate. They don't front you the money and you have to pay them back.
What are you talking about?
The New Commanding Heights are education and health care, which are rapidly expanding sectors where credentials and regulation are important sources of rents.
http://www.arnoldkling.com/blog/klassic-klingisms/
In Marxian economics, the "commanding heights of the economy" are certain strategically important economic sectors.
https://en.wikipedia.org/wiki/Commanding_heights_of_the_econ...
Bad example, mortgages keep jumping because property values keep increasing. Property values keep increasing because demand is exceeding supply. As more people can access mortgages due to lower rates, the demand shoots up and so does the property value which leads to a race to the top (bottom). Lol
>Cars? Yep, most cars are bought on finance, people couldn’t buy new cars without the finance.
Yea here we don't have a real lack of car supply. People are financing based on _wants_ rather than needs.
Not quite. Property values keep increasing because the monetary supply keeps increasing, one effect of which is that large property owners can corner markets by buying up properties and warehousing them until they see the prices they want to sell for. This appears as a lack of supply (not enough houses) when it's really a lack of market forces forcing sales (not enough houses on the market). The remedies to these two situations are very different.
But the immediate illiterate defenses in the short time this comment has been posted are wild, if sadly expected.
Yes, for the love of all that's holy: private equity has fucked up housing across the planet. Learn about it a little before insisting otherwise!
This isn't simple supply and demand, nor is it all a big mystery. It's certainly not a 'bad example' of the finance industry fucking up a life essential to profit off it at our expense; it's a core, fundamental example.
People have done huge amounts of work exposing these shenanigans. All the information needed to educate yourselves is a few clicks away. Here's some titles to get you started:
"Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream" by Aaron Glantz
"Private Equity at Work: When Wall Street Manages Main Street" by Eileen Appelbaum and Rosemary Batt
"The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class – and What We Can Do About It" by Richard Florida
Stop letting the industry off the hook for the unimaginable damage they've inflicted on the heart of society. Step one: gtfo out of denial.
What does this mean? Are you saying mortgages are recent? Prices are a function of supply and demand, not of access to capital.
> I really wish society would have stopped this in its tracks
People didn't own houses before. They were serfs or renters. Mortgages meant people could access a lifetime of money now and afford a house.
Demand for living and having somewhere to live are inelastic. As a result, these markets are especially prone to distortionary effects caused by monopolies, price fixing, and price non-transparency.
I think I get what you mean with this, but I'm not sure I follow it completely.
Banks are able to extend large amounts of credit that are backed by a small percentage of the credit offered. People are generally bad with money and will take what the bank offers them if they think they can afford the monthly figure. The bank and it's lending practices therefore seem to have an (indirect?) influence on how much money someone has to pay for a house, and therefore what houses sell for in the market. Whether all this does is reveal a houses true value in the market, as opposed to artificially increasing it, I'm not sure.
It seems like it's possible for a banks mortgage lending practices to both positively increase access to mortgages while at the same time making houses more expensive. At first I think this is counter intuitive, but I think there's a logic to it. Whether this is a good tradeoff, is separate to whether the loaning itself increases house prices.
That is simply wrong.
The demand curve is the relationship between quantity bought and price. It definitely shifts with how much money people have, so in the case of houses depends entirely on access to capital.
If a buyer cannot access capital (money), then no amount of demand will facilitate the exchange and the seller might supply a different buyer who has capital for a lower price.
If the mortgage were to suddenly disappear I would expect the housing market to have a similar contraction as in the recent recession when poorly understood risks from mortgage backed securities caused a decrease in mortgage availability.
And easy access to debt massively shifts the equilibrium point on the supply/demand curves.
Cars, houses, college, even cell phones or furniture can have far higher market prices when people switch from paying full-price in cash at time of purchase to making payments over months or years.
Access to capital influences how much money can be spent to satisfy a demand.
I think the word you're missing is yet. Private equity hasn't bought everything and jacked up the prices yet because they have plenty of targets generating reliable profits for them, and they don't have the funds to buy out the entire restaurant industry while also doing everything they're already doing. They would also still have to compete with major national players (McDonald's et al.) who are impossible to buy out, which is something the healthcare industry didn't really have when private equity came knocking.
And notably, it is starting to happen to car mechanics - particularly those who are contracted by insurance companies. It's not hard to imagine a future where they move on to smaller independent car mechanics who are gradually bought out by megacorps and/or private equity, the industry consolidates heavily, and everything gets worse.
Are other markets well functioning in the US? I'd argue Private Equity is ruining a lot of them.
Also, you're missing one big fundamental issue. Healthcare is not a good candidate for a "free market", because it's an inelastic "good". You can't choose when to get sick or have health issues. You can't change the fact that prevention saves lives and money. So, healthcare cannot ever be a free market and function properly. The only way to make it function is either by centralisation or heavy regulation. Curiously the US is practically the only country that managed to screw up and have a bad mix of both options while also having a broken market.
And to supermarkets - like Morrisons in the UK. And department stores - like Debenhams in the UK.
They join a long list of viable businesses that were/are vampirised by PE for quick returns.
Medicine in the US is just the most perfect platonic example of a PE chokehold on a critical market sector which has drastically negative effects on the rest of the economy, and on individuals who have to deal with it.
There's plenty of examples against your case already in the comments against other points but the reason medical care is so damn expensive is the same reason your internet bill is so expensive (for poor quality): lack of choice.
You don't really have an option to haggle or shop around for the best plan when you broke a leg and are being rushed to the nearest hospital.
You made the choice on plan half year ago when you were healthy and you're in no state to have a calm discussion with the ambulance about what has the best price per value with your tibia jutting out of where your calf should be.
From my understanding - the choke point here is Medicare funding for residency slots- which funds most of the residencies in the US.
Now the AMA did absolutely lobby for limiting the supply in the 90s:
https://www.nytimes.com/1997/03/01/us/doctors-assert-there-a...
But they’ve done a complete 180 since then - but it’s ultimately up to the federal government.
Most people pay for college.
Why are we using taxes to pay for rich people's college?
EDIT: Rate limited and replying to 'FAANG Workers make the same as doctors':
"You didn't include any numbers.
You also decided to choose the most elite workers living in a high cost of living area to compare to.
Not fair! Not fair! There is a bit of malice to do such an unequal and unfair comparison.
If we look at reality, you are never going to have the moral high ground. The wages are not-market rates, its due to lobbying/artificial scarcity that benefit the members only. The majority lose and the richest profession gets richer.
I hope people can see past the pretty paint you were able to place over reality. "
Probably close to half of doctors make less money than the average person working at FAANG.
Medical school is outrageously expensive.
If you think people are going to put up with the misery of being a doctor, delay any wages until 34, basically live a lower middle class life until 50 while paying of medical school debts, and then barely be in the top 10% after that - you're gonna have a really bad pool of people signing up to be a doctor.
We absolutely do not need to be making medical school EVEN MORE expensive.
I feel like comparing doctors as a whole to the subset of software engineers who are at FAANG is not really apt.
> delay any wages until 34
What?
Out of HS at 18, BS at 22, MD at 26.... then what? At least 2 years of residency (PGY1, 2) and you're 28. And then what are you doing for the next SIX years before you're earning wages? Uhhh.
> lower middle class life until 50 while paying of medical school debts
I work as a paramedic, and have multiple provider friends, from family practice, to EM to anesthesiology. While the anesthesiologist is 40 and already owns a book store, and multiple homes, none of the others are wallowing in the "lower middle class". You can pay a lot of student loans at the $300-350K EM residents make in this area.
> barely be in the top 10% after that
I think you're exaggerating on top of exaggeration.
The top 10% line would be at $86K/year.
Let's be more real. Public Health pays the lowest physician salary, averaging at $249K/year. That already puts you in the 2%.
Cruise on up the ladder and Gastro, Cardio, Ortho and Plastics all are north of $500K.
Yes, there is malpractice insurance, and it's not negligible (and some networks will provide allowances to providers for this). But it's also fairly linear to specialty and income, and often not as much as assumed. Obstetrics, as expected, is the highest, at ~$42K (with average salaries of $390K), family practice averages around $10K, and even my anesthesiologist friend is only paying around $13-15K/year.
https://residency.wustl.edu/residencies/length-of-residencie...
There is a real shortage of residency program slots. Every year some students graduate from medical school with an MD but are unable to practice medicine because they don't get matched (some of those do get matched the following year). The most effective thing we could do to increase the supply of physicians (and reduce their wages) would be to get Congress to allocate more Medicare funding to expanding residency programs.
The top 10% in wealth is >$1M - doctors on average do not hit that wealth until 55 (w/o INCREASED tuition costs): https://www.leveragerx.com/blog/average-doctor-net-worth/#:~....
> Let's be more real. Public Health pays the lowest physician salary, averaging at $249K/year. That already puts you in the 2%.
It does not put you in the top 2% if you have a tax rate of ~45% and a post-tax student loan payment of $4k per month.
Until your medical debts are paid off - you're not making much more than a mediocre mid-level SWE can make at an average startup.
And you have to put up with the misery of being a doctor, as well as the misery of medical school.
The top 2% pays tax, too. They're still in the top 2% of income, by definition. And that tax rate is more like 35%, less if married.
After that student loan you're still taking home ~$11K/month.
Other professions with higher pay also have student loans, you don't get to say "doctors are different and aren't in the income bracket you think they are because loans".
Residents are employees of teaching hospitals. They aren't really students. They're more like post-docs in academia. Even though hospitals can recoup some of the expenses of their residency programs by charging patients for care delivered by residents, overall residency programs operate at a financial loss. The funding has to come from somewhere. Lowering already low wages for residents to close the gap and thus forcing them to take on even more debt is no solution. We all benefit from having more physicians so I fail to understand the objection to subsidizing residency programs with taxes.
Given that they have this valuable resource for an incredibly low wage - where is all the money for residency going? Why do hospitals require such a large subsidy to fill the gap?
This isn’t an accusation that hospitals are misusing the money - I genuinely do not understand the costs that go into residency here.
I wonder how many people think your comment is a source for your claims.
>That's a complex question with no clear answer.
Yes, this is corruption. Lack of transparency is a benefit to the stronger powers.
> How do the accountants allocate overhead and other indirect costs besides resident wages?
They get to write off indirect expenses in taxes AND get tax dollars. Its even worse than it appears.
Most teaching hospitals are non-profits, often owned by educational institutions or state/local governments. They don't "write off" expenses from an income tax perspective because they aren't subject to income tax in the first place. Cost accounting as a discipline is only loosely related to financial accounting or tax accounting.
As for corruption, there are probably ways the current system could be improved. But you haven't presented any evidence of widespread illegal activity.
>But you haven't presented any evidence of widespread illegal activity.
Its an immoral activity to corner a market, take tax dollars, lower quality for consumers, and raise prices. Its not illegal.
Its the hourly rate they whine about and if you ever met a resident, they count their sleeping/napping hours for some reason.
Wait til you learn about EMTs and paramedics. EMTs can be making as low as $11/hr. And at the last ambulance service I worked at there was no upper cap on hours. The only restriction was you had to be off-duty for 8 hours after every SIXTY on-duty.
It does. The reasons you cited just makes it worse in medicine.
Who knew veterinarian clinics would be the next to fall to VC? And I am hearing that independent senior living is being raided by VC, perhaps cemeteries as well....
VCs invest with the hope the investee will grow quickly. PE firms do not have that hope. This distinction has a large effect on the strategies available to the investor. A PE firm for example will usually be averse to investing if they will not end up with managerial control over the investee, but a VC fund routinely makes such investments.
It's the $50k/year in insurance, copays, etc. I don't love.
Not THAT well.
Similar things have been happening to mechanics as well.
If and when I ever write my Highly Opinionated Guide To Comment Section Ettiquette, my #1 rule would be about Dennett's Principle of Charity, but #2 would probably relate to the thing you've identified here. Namely, to the extent possible, try not to resort one-off examples to represent systematic processes.
I also think that politicians should have to pre-declare by a day or more any financial trades.
Corporations are allowed to exist in a state beyond what an individual can, and as a balance should be very limited in execution and through the past century in particular are anything but. Their power is a grant of govt, and should also be limited. In the end, that's where I stand on it. I'm all for maximizing personal liberty, and even small business allowances. Major companies should be focused on stability with growth or divestment. Foreign owned companies should be more limited even. That just isn't the case today, and it's a shame.
It's as if not only was there a cap on the number of waiters, there were strict regulations about how you got your food, and that there couldn't be restaurants where you serve yourself, have buffets, or even that you could feed yourself cooked meals at home without going to a restaurant. All the menus have to be approved by a national food association etc etc etc.
There's so many factors involved in healthcare problems in the US it's impossible to pin it on just one thing or even a couple of things. I also feel like the public discourse seems to be largely out of sync with just how much change is needed to how things are done.
I kind of thought the pandemic might have created an emergency situation that would have leveled the status quo and allowed for a restructuring of things along the lines that's needed, but its seemed like it just barely held on and then went back to things as usual.
Not to mention restrictions on negotiated rates by medicare and other agencies. I'd personally like to see all Govt employees, Veterans and Medicare replaced by a non-profit insurance corp, that is able to negotiate and establish baseline care, without eliminating private coverage, but anyone can buy the public plan (employers etc) as a way of leveling (some) competition.
As it is, the recent South Park special does a relatively good job of demonstrating how messed up the system is.
Then you have the fact that not everyone pays, so they subsidize the cost. Think of all the homeless people who got treated.
Never take a loan unless you're literally battling something life threatening and that's your only option available. Otherwise, always haggle the billing department down.
It's all a messy cost because its all subsidized.
I got this information from a former hospital billing manager who I used to report to at a former software job. I don't know what can fix all of this, but it feels like the college issue of throwing more money at it just gives them free reign to raise prices at ridiculous rates.
Existing practicing doctors went on strike, they didn't want more competition. Funnily, population sided with doctors, instead of president.
It isn't because of that alone. In PH and Korea, senior doctors are expected to oversee junior or trainee doctors. These senior doctors are already overloaded with both giving care and training junior doctors.
Adding more MDs won't change anything because the residency/training bottleneck still exists and there is no way to change that.
This is why my SO left Vietnam for the US - getting paid $1-2k a year to train 6 juniors and work 60 hour shifts providing care is hellish.
The same is happening in Korea as well, with senior doctors leaving for Japan and the US now.
How? You need a residency to actually learn how to do stuff.
Just getting an MD is not enough to make someone ready to be a practicing physician.
Graduating more MDs doesn't automatically create more specialists tomorrow.
This is medicine. That short term pain means more people die than would have before.
When specialists quit, who replaces them? You need to be trained - just book learning and shadowing during an MD is not enough.
> everyone already in the industry needs to work even harder to do that
Everyone in the industry is already working hard.
The average physician works around a 50 hour weeks but 25% work 61-80 hour weeks [0].
It's already teetering on the brink due to burnout.
[0] - https://www.ama-assn.org/practice-management/physician-healt...
That said, I do think there's probably more of a role for some graduating med students than we use now. I don't think they need a 3-year residency to enable them for many general practitioner duties particularly in rural settings where the patient load is less, the pay is likely less, but the cases are more homogenous.
If 1 person trains 6, then in a few years you now have 7 trained doctors who could either train 42 more or, if given half the workload, could train 21 more.
If the training doctors are always oversubscribed then there's a deeper problem in the system that's creating this bottleneck.
Plus SO often implies OP was a citizen and then SO comes in on a priority VISA program. They do check to ensure you really are romantically involved. There are a number of poor who decide nearly any American is a better life than they could have at home and so will sign up for a blind marriage to anyone. A doctor likely has means to do some verification of a potential mate before committing, but if they find life bad enough back home they can have low standards. (from what I can tell it mostly works out for those doing this - some get abused, but most seem to have a good life)
Also, we are definitely missing a large part of the story. There are very few medical schools outside US that will qualify you to practice is the US. Getting recertified in the US is extremely difficult, especially from a developing country with much worse healthcare standards.
Not sure, but the counterpoint is the housing crisis. So painting it as something exclusive to healthcare suggests that there's no possibility of it being a systemic problem with Private Equity.
https://www.propublica.org/article/when-private-equity-becom...
One of the other comments raised said "because you don't have to go to those places," and it intuitively feels correct that basic needs are ripe for price gouging when supply is limited. But I'm out of my depth. Happy to hear other comments.
It does, all the time. These places just offer services that are less prone to "whatever price it is, I'll spend it".
not all medical needs are like that. Only in emergency care.
For things like a regular checkup, a flu shot, or obesity etc, you have time to shop around.
So not unlike the car services. Except that the provider of healthcare is paid highly, and has been limited in supply like the parent poster's comment.
Why are doctors cheaper in cuber? They cure the same diseases after all, and likely learn off the same knowledge.
When Jimbob goes to the emergency room at his local hospital because he has a cough that just will not go away, he's probably going to walk out of there with a script for some cough syrup or antibiotics and not a lung cancer diagnosis. Either way, he's there, it's made him miserable enough to get up and go somewhere, and he's very unlikely to want to leave without some sort of proposed solution to his problem. So he'll pay what the provider puts on the paper without shopping around.
Should he go to an urgent care center or make an appointment with a PCP? Absolutely. But he didn't. And there's millions of Jimbobs.
And that's before getting into the "frequent fliers" who are on the fringes of society and see a visit to the emergency room as a guaranteed way to experience at least some human compassion.
If you need to go to a doctor you have choices. Most healthcare isn't emergency room visits. And the whole "health is priceless" is laughable considering obesity and smoking. You're paying money to be less healthy and now you tell me "for my health, whatever the price is I'll spend it".
There is demand elasticity, but health is weird.
Lots of people skip or avoid medical visits due to the cost. That’s demand elasticity.
For some things, that’s fine! A condition ends up going away in its own, or doesn’t go away but remains a minor annoyance that the person bears. Demand elasticity.
But for some conditions, that’s actually a much worse outcome. The condition worsens to the point where it becomes a major impact to someone and must be resolved (or they will die, be unable to work, etc). Often, these kinds of conditions are much much more expensive to treat when they are severe. Consider a bacterial infection. Discovered and treated early, it might be staved off with a cheap form of antibiotics. Left to fester, the treatment required might be much more costly: amputations, major surgeries, intensive care for a week, etc. In these cases, the “demand elasticity” didn’t work out. What appeared as elasticity actually ended up costing society much much more.
> You're paying money to be less healthy and now you tell me "for my health, whatever the price is I'll spend it".
Most people aren’t saying this about marginal medical care. Many many many people in the US regularly avoid interacting with the healthcare system due to the price.
This kind of saying applies to critical and life saving care. Like: “we’ve discovered you have cancer. We can manage it, and you have a 90% chance of survival, but the treatment will cost $500,000. Do you want that?”
Imagine you get knocked out cold and wake up seated at a restaurant with an empty plate of food. You were fed the food but you have no memory of it. The bill comes and it's $5,999. Would you feel like this is fair?
Meaningful ones? My area has two major hospitals, and two major insurers. Each hospital has bought up the vast majority of primary care practices in the area and slapped their logos on them; each insurer has a preferred hospital they steer you towards. Within that hospital's network of practices there's no meaningful competition. Most people can't pick between the two insurers; work decides.
> And the whole "health is priceless" is laughable considering obesity and smoking.
It's priceless when acutely at risk. People are horrible about preventative care, but they'll shell out virtually anything not to die next week.
It's just the natural limits to our concept of property at play. Maybe everybody knows what you mean if you say that you're going to go down the street and buy yourself a surgery, but nobody thinks it's a natural way to talk about that sort of thing.
https://www.nbcnews.com/business/consumer/private-equity-rol...
> How private equity rolled Red Lobster
> When a private-equity firm bought the iconic seafood chain in 2014, it sold the real estate under the restaurants for $1.5 billion. Then the restaurants struggled to pay the rents.
> In recent years, private-equity firms have invested heavily in all areas of industry, including retailers, restaurants, media and health care. Some 12 million workers are employed by private equity-backed firms, or 7% of the workforce. Companies bought out and indebted by private equity go bankrupt 10 times more often than companies not purchased by these firms, academic research shows. In a report this month, Moody’s Ratings said leveraged buyouts like those pursued by many private-equity firms drive corporate defaults higher and reduce the amounts investors recover when the companies are restructured.
TLDR Corporate strip mining and dumping the enterprise carcass on bag holders.
I think it depends heavily on what the motivations are for that third party. I live in Ontario, Canada, and OHIP pays for any hospital visits I need— but they're not a for-profit entity, they set the prices based on what's fair in collaboration with providers.
Notably, OHIP does not cover optical, dental, physio, massage, psychotherapy, or prescription drugs, so those are all paid for by conventional insurance, typically tied to your employer, with predictable results— it's all more expensive than it should be, pricing is often vague and hard to predict (especially with dental), and people defer care, making what should be simple problems into more complicated ones.
My in-laws lived near the Mexico border (until they died) and their church around the country regularly sent members to them when someone poor needed surgery to arrange with a much cheaper hospital in Mexico to take care of them. Mexico doesn't have the same standards as the US (or didn't 30 years ago), but it isn't hard to figure out which doctors are just as good as anyone else in the US if you research.
So it's not that simple.
I am not sure if there are many people out there who would want to see a cardiologist that was trained for the same duration as a waiter.
What would happen if diners split their bills evenly every month?
What would happen if the company profit is legally capped as a percent of that bill?
I think these are the biggest factors.
They get bought out by PEs as well.
> The other problem is the regulation and groups like AMA
My SO is a Doctor, and most of her overhead is from paperwork, billing, and IT.
Managing a HRM, your clinic's IT, your clinic's medical devices, your clinic's digitized patient records, the paper trail needed to get paid, etc is hard.
Most older practitioners have sold their clinics to PEs for that reason - they don't want to spend an additional 20-30 hours a week dealing with the issues above.
This is why they sell off their practices to consolidated groups, because they will unify these services but give the Doctor a paycheck.
I don't think PE is the problem here. We love to hear the negative stories but there are also lots of success stories.
From the healthcare industry, I believe the primary care model is broken. There is a nationwide shortage of primary care doctors, usually the ones wanting to get in primary care enjoy the touch on patients. The problem is what you outlined, to run a primary care practice you need to employ a number of people that creates overhead that now requires you to be very rigid in the practice to ensure you can both cover your expenses and still make a salary yourself.
People smart enough to go to med school are (generally) also smart enough to do an ROI analysis. If I can make $500k/yr as an oncologist and pay off my student loans in 10 years vs. getting paid $150k/yr as a PCP and pay off my student loans in 30 years, which route am I going to choose? People that want to be PCPs are making the choice to go into higher-paying specialties just because it is expensive to become a doctor in the first place.
Obviously it is possible to change the economic incentives to increase the supply of PCPs. One simple way would be to just create full-ride scholarships for those that want to be PCPs to dramatically increase the ROI for being a PCP.
So I agree money is a factor but I also think the current insurance model makes its incredible difficult to run a PC office. You have to bring on significant overhead which you then need to cover my making strict quotas on seeing patients. I don't believe this aligns with what PCP enjoy doing.
The American Primary Care model doesn't work, but the Canadian and British Single Payer model doesn't work either.
You're damned if you do, and damned if you don't
We own a clinic too.
You either are lying because labor is over 60% of the overhead, or you don't have labor.
Anyway, there is not much to complain about. We can be terrible business owners and overhire, and we still are profitable. The margins are insane on private healthcare and breakeven on medicaid.
The losers are patients, especially private paid patients. Medicaid patients often end up with significantly more treatment since its free.
It does: Red Lobster, Fairway in the USA, Morrissons in the UK, some others [0].
[0] https://foodinstitute.com/focus/private-equity-bankruptcies-...
It also happens to restaurants with much more sever outcomes
Private Equity bought Sears, sold the land under Seas to thmeselves, charged Sears exorbitant rent and eventually bankrupted the company. https://www.cbc.ca/news/business/sears-lawsuit-lampert-1.510...
Red Lobster also filed for bankruptcy for similar real estate deal related reasons . https://finance.yahoo.com/news/bad-real-estate-deal-not-1730...
Restaurants too have slowly been gobbled up in my area of NY suburbs into larger groups. I think the Main St here with 20 or so restaurants is owned by just 3 groups.
Supermarkets are an incredibly low margin business and they would have to compete with existing players on those thin margins including titans like Walmart. There's not much more blood to extract there.
Independent mechanic shops have been dwindling naturally because it's too expensive for newbies to get into the field, especially between rent and needing all their own tools. End of day, formally "car shop" areas here are being bulldozed for luxury rental apartments.
Shoe stores, now they have a problem. They don't turn the inventory over but monthly or worse.
But McD's? They sell that hamburger a thousand times a day.
I don't think that is how margins work. Let's say you sell a unit of bread for $100, but you spent $99 the make the bread that's a 1% margin. If you sell a single bread per day for 365 days you earned $36500 and spent $36135 to make those bread. That is still a 1% margin.
That's what annualizing does. It's on the dollars invested, not the money thrashed.
If I look at that business in a year had $464 revenue and $99 cost. Investopedia defines gross margin as "(Revenue − Cost of goods sold) / Revenue" So that would be (464-99)/464=0.79. So that is a 79% margin. Below the 365%. Where I'm going wrong?
Look, I'm just making the point that comparing margins on a sale is a crappy way to compare business. It ignores the value you get for each investment dollar. Correct that by annualizing return per dollar. Then you see the relative value of business models e.g. McD's vs grocer store vs shoe store.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2585909/
The solution is to socialize it.
The UK has slightly higher life expectancy than the US, at less than half the cost (and yes, that's including taxes; https://data.oecd.org/healthres/health-spending.htm). People die waiting here, too; they're just bankrupt as a bonus.
You are just codifying the corruption.
Yes a bunch of countries like Singapore, Switzerland, Netherlands didn't socialize it? And their systems seem to work pretty good?
- Insurers in Switzerland are obligated to insure everyone and can't make a profit on the base plan.
- Netherlands has similar requirement for cheap (and subsidized) mandatory insurance plans.
I mean... do you even knowledge? Words? Logic? Think?
Counterpoint number one: transit.
Counterpoint number two: utilities.
Counterpoint number three: healthcare.
In all three of those natural monopoly, little elasticity, high upfront costs, "goods", we have plenty of examples of countries and localities with "socialised" (centrally managed by a public entity, subsidised to cover some to most of the costs) and with "private" ones. Unquestionably "socialised" ones in similarly developed countries perform much better - lower cost in total and to consumers, better coverage, better outcomes.
You can have all things that make sense be managed centrally, and everything else left to a free (ish) market. It's not a binary choice all or nothing.
The UK is a perfect example because they privatised transit and utilities, and the result is a steep decline in quality with increasing costs, and that's not even counting externalities like water utilities dumping sewage in rivers and the sea.
See, price of insulin.
OR, at least make a free market for real. Make insurance companies compete across state lines, make charges transparent not a surprise gatcha after the fact.
Nobody would take their car to get fixed and accept something like "I know you came in for oil change, but we decided to replace the break rotors, here is a bill, you have to pay or we don't give the car back".
Sadly, all the 'free market' politicians, are in the pocket of the industry and work to prevent a 'free market'.
This is a bafflingly underinformed rhetorical given the previous sentence. It happens all the time with the exact counter-examples you list. I'm honestly shocked you mentioned restaurants when articles were floating around HN less than a week ago about the death of Red Lobster by way of private equity:
https://news.ycombinator.com/item?id=40233029
https://finance.yahoo.com/news/private-equity-keeps-failing-...
https://www.pepboys.com/about-pep-boys/media-center/press-re...
https://www.reuters.com/breakingviews/private-equity-superst...
> Why don't new cardiologists enter the field? Because there is a cap of graduates that the AMA controls.
The AMA doesn't have the authority to cap anything, and I encourage you to devote more research to your premises before relying so heavily on them. The cap on new doctors arises from a complex set of competing laws, policies, and blended public/private billing models for how doctors get trained and paid during residencies, which itself is downstream of how hospitals are funded and operated. There is no singular "do this -> get more doctors" solution; it is enormously complicated, often by both design and necessity, and is not easily untangled with the naive techie "just make a pull request" mentality that pervades the HN comments section. You also seem to misunderstand what the AMA does and have miscast it as some sort of central licensing authority when most of what they due is effete lobbying and begging physicians for donations/dues. They're annoying and probably a net negative for public health at this point, but they're not some boogeyman holding back the libertarian fantasy of an unregulated healthcare market.
>Try to ask your doctor how much something costs and they'll stare at you like you have two heads. Imagine getting your car fixed without knowing how much it's going to cost
I can't help but notice that you didn't mention the role of private health insurance when that undergirds much of the grousing. Doctors can't give you an answer on what your procedure will cost because they have to play a multi-stage game of Price is Right with a cartel of investor-driven private health insurers with the express business model of avoiding paying for those services whenever possible. The fact that everyone BUT the investors suffer from this arrangement is the actual, literal point of the article - it's even in the byline!
This is why lasik eye surgery is extremely cheap as it's not controlled and gated by legislation which keeps down the supply.
In medicine some of that limit is justified by preventing the whole field from degenerating into gimcrack quackery, but the limits aren't just around certifications or credentials or experience. They are, as you state, hard limits in many cases designed to jack up prices.
With housing the cartels are more decentralized to the neighborhood but the effect is the same. PE gets blamed there too when they're simply taking advantage of the situation to extract some of that rent.
It does? How did you miss all of the recent news around Red Lobsters acquisition by PE. Where they bought it, saddled it with debt, sold the land under each restaurant, pocketed the money and then left?
Like you said, it was a failing business.
PE didn't come in with the goal to turn Red Lobster around. EVERYTHING the parent poster described was things PE didn't do to save Red Lobster, it was "How can we suck this thing dry before it dies".
The most charitable thing that you could say is that PE was putting Red Lobster out of its misery. While making bank on doing so.
I worked in medical billing for years and my suggestion (and all the people in billing agree that I talk to) is to make direct insurance payments illegal. It’s fine to have insurance reimburse you, the payer. But don’t have them negotiate or talk to the medical staff. Then everyone pays less because the hospital don’t know what you can pay.
Great example I had recently, I had a bill of $75 for a regular medicine. Insurance covered $35 and I paid $40. I then went off instance when switching for a month. It was $40 off insurance. The same price, the pharmacy was just pocketing the extra $35. They know what you can pay already, so there’s no negotiating or downward pressure on price.
Naïve, but not wrong.
There are a lot of factors, but jacking up prices on an inelastic goods is pretty common.
And if you are suffering a heart attack, getting help is inelastic.
Nobody needing health care is like "Wait, don't save me, let me shop around a little, do you take coupons".
Seriously? Look around. It does.
Eg, ticketmaster? OK not PE, but the same deal, they buy/merge with competition and you get a monopoly, and then abuse. Try Matt Stoller's BIG newsletter for all the gore.
Some similar dynamics apply in that market in that if it's winter and your heater is broken, you want it fixed fast, that you have less knowledge/information than the tech/salesman. Also, you rarely hire these contractors, so they're much slower to get a bad reputation in a homeowner's mind.
A lot of PE enshitification really just amounts to monetizing dishonesty. It used to be that an independent plumbing company would have an owner in the community who had to see his neighbors every Sunday in church, whose kids were on the little league team, etc, and he cared about his reputation in the community. The PE guys swoop in from out of town, and all of this stuff is just a number in a spreadsheet that they want to go up. They then just rewire the incentives in the company so that the workers have to be dishonest in order to make a living, and the number goes up.
It DOES happen with car mechanics. Leonard Green LP owns Caliber Collision, Carlyle Group owns Service King, and Icahn Enterprises owns AAMCO, Pep Boys, and Precision Tune Auto Care.
While I don't have a specific example in my head about restaurants and grocery stores, I have to think that there are steps in the value chain that are absolutely owned and influenced by PE. Logistics? Real Estate?
Real Estate is a great example: most commercial real estate is held inside PE portfolios via Real Estate Investment Trusts, and lease rents are an extremely non-trivial portion of business costs for EVERYBODY, espcially grocery stores and restaurants.
But I agree about the many social and regulatory complexities regarding health care specifically. Often that complexity is what makes industries like health care such a lucrative investment for PE as it can be easier to hide incentive structures.
You have to ask yourself what makes healthcare unique to nearly every other well functioning market in the US. The bigger issue is there is third party paying for things. Try to ask your doctor how much something costs and they'll stare at you like you have two heads. Imagine getting your car fixed without knowing how much it's going to cost
The other problem is the regulation and groups like AMA. Why don't new cardiologists enter the field? Because there is a cap of graduates that the AMA controls. Why doesn't a new hospital open up? Because there is often a "certificate of need" to open a new health care facility and other health care providers in the vicinity get to determine who is allowed in.
What would happen to restaurants if new waiters had to go to school for 8 years and there was a cap on how many can graduate and you need to go to a board of neighboring restaurants to decide if you can open yours, and diners are forced to sign up for some company to pay for all the meals.
https://www.ncsl.org/health/certificate-of-need-state-laws