Yep.

https://news.ycombinator.com/item?id=42495074

... are you joking?

Healthcare is one of the most regulated industries in the United States.

Want to be a doctor? You've got the aptitude, the knowledge, the mindset, and the will, but a government-guaranteed cartel of medical schools won't let you in, so too damn bad. Learn to code.

Want to open a clinic? You really only need about a half-million in hardware to operate at the level of a 1980s hospital, but regulatory compliance will push your annual opex into the millions as a baseline, not to mention having to deal with the nightmare that is health insurance.

Those "massive entities" you mentioned are entirely protected from competition by force of law.

You know why healthcare used to be cheap? Nobody had insurance.

Anyone that had the aptitude and wanted to be a doctor basically could.

You went to the hospital, paid your bill, and that was that.

I'm not saying "zero regulation, caveat emptor!", but over the past hundred years, the precise opposite of "deregulation" has happened across every aspect of American life.

How come it's cheaper in places where everyone has insurance?

Because there's a single payor that tells providers how much things are going to cost. The short answer for why US healthcare is so expensive is that Americans are economically disconnected from the price of the healthcare they are consuming. There is absolutely no free market system happening there because almost all the costs are hidden behind insurance schemes.

Because everybody besides the US regulates prices.

The problem is private insurance companies + private hospitals. They shouldn't exist.

Healthcare is an inelastic service: people will pay everything to get it. So private hospitals in a free market are pushed to bill their services as higher as possible. Actually, their prices would go to infinity, if not limited by people total savings and earnings.

So, here the insurance companies make the problem worse: they give people access to "infinite" credit. So you can pay for those exorbitant prices. But with insurance you just increased the pool of money people can use for health, so private hospitals can and will increase their pricing. Add more free market competition and you get the disaster of the USA healthcare system.

Because of that reason, basic economics, is that for profit Healthcare cannot work long term. The only way to make it work is making it a public service. But in USA politicians will cry that is comunism, so they won't do it.

And the USA Healthcare problem doesn't limit itself to USA. As americans are unable to pay for healthcare there, they started doing medical tourism, which is making health prices in other countries more expensive too.

Japan has private insurance companies and private hospitals, many of them, and does just fine.

> How come it's cheaper in places where everyone has insurance?

Those places don't have a hellish Frankenstein's monster combination of public and private and a load of regulations at the federal and state levels all adding up to high costs that have to be passed on to the consumer, but also weird niches of market inefficiencies that can be exploited by anyone who's managed to luck or judge their way into an advantageous position.

They also don't fund most of the world's healthcare advancements, which the US does.

They also cut off care at a certain point, whereas in the US you not only have access to most of the cutting edge treatments in the world that just aren't available on single payer systems, as they don't provide enough value, you also can find someone to pay to do it. You can bankrupt yourself on cutting edge treatments if you like.

I don't know what the answer is, other than "try again" and have a nice multi-insurer model, which I think one of the Scandies has, that just competes on efficiency and has its payouts and insurables defined by government, or maybe a single payer model. Or make healthcare a state-level problem and have each state solve it differently without federal overhead.

Providers also make a lot more money in the U.S. than in other countries. This encompasses much more than just doctors, but try running on a platform that’s seen as “cutting doctor salaries” and see how far it gets you.

100%. Deregulation hasn't happened. Regulatory capture and loss of effective regulation have both happened.

> Healthcare is one of the most regulated industries in the United States.

And yet other countries have even more regulation, and manage to deliver cheaper and more equitable healthcare overall, with better public health outcomes when measured at the national level

For example: in Australia, the federal government is a near-monopsony purchaser of prescription drugs, so it has enormous negotiating power with the pharmaceutical companies. By contrast, in the US, the federal government’s role in purchasing drugs is much smaller: the end result is higher drug prices, although the downside of Australia’s model is it can delay availability of new drugs. (Those with unlimited ability to pay can still purchase drugs privately at whatever cost the manufacturer will sell them-you can even get bureaucrat approval to import unapproved drugs for personal use if you can find a senior clinician willing to assist you in it.)

Most Americans don't want equitable healthcare they want the best they can afford and they want the newest treatments available.

The waiting for the patent to expire and buying in bulk keep down the costs down works. The US couldn't use the generic strategy because the drug companies get funded and create the new drugs this way. Cutting off the funding would mean no new drugs to copy so no new generics. Australia would have to start funding research.

> The waiting for the patent to expire

That's not what the Australian government does.

Even for prescription drugs still under patent, the federal government negotiating on behalf of the whole country as a monopsony purchaser can demand (and get) much bigger discounts. (A monopoly is when a market effectively has only one seller, a monopsony is when a market effectively has only one buyer.)

Whereas, in the US, each insurer negotiates separately, so all but the very largest have weaker bargaining power than the Australian government has, simply because they don't represent as many insureds. The US has over 1000 health insurers, only the top two or three (such as UnitedHealth Group) have more insureds than the Australian government has (26 million).

Plus, even though a handful of very large US insurers such as UnitedHealth have more insureds than the Australian government does, the fact that the Australian government is a sovereign state and not just the purchaser but also the regulator and legislator gives it additional negotiating clout that such private insurers lack. Also, if UnitedHealth refuses to reach a deal with the drug manufacturer, they risk losing insurance customers to other insurers who are willing to do so; Australians can't realistically switch public health insurers (moving overseas is the only real way; private health insurance usually has very modest prescription drug benefits)

> Australia would have to start funding research.

Australia actually does have significant medical research funding. Unfortunately it seems to be a struggle to find good data on exactly how much (in easily comparable terms, such as %GDP) – the WHO's statistics [0] on this topic are missing both the US and Australia for whatever reason. But even in the absence of hard figures, I'd totally believe the US spends at least double (on a % GDP basis). But I think that's part of a broader economic problem with Australian underspending on R&D (both public and private) which goes beyond just health.

The other problem I know, is Australia has largely lost its ability to productise pharmaceutical innovations (outside of certain niche areas), which means even when some novel drug is discovered in Australia, they need to turn to to a US or European company to turn it into a product. But that's more a consequence of poor industrial policy (most of Australia's pharmaceutical manufacturing sector moved overseas, and what's left is mostly lower-end stuff like vitamins and herbal supplements, with rare exceptions such as CSL) than anything to do with drug pricing.

[0] https://www.who.int/observatories/global-observatory-on-heal...

> But I think that's part of a broader economic problem with Australian underspending on R&D (both public and private) which goes beyond just health.

That doesn't matter to this point. What matters is the US pays for the R&D that Australia gets to benefit from. You can stop R&D and drive down prices, as long as you're comfortable making world drug discovery grind to a halt.

As sibling mentioned thats not the model. From what Ive seen australia lags US access on the order of 6months to a few years for most things. Effectively theres an additional review period where TGA reviews foreign research and approval before (generally) allowing and entering it to the ARTG and PBS with the relevant prescribing advice. Once its on the MBS/PBS the patient gets access through their prescriber and/or chemist.

The PBS listed medications are essentially price capped copays at the point of sale, with the bulk of the cost covered directly by the government (who negotiates prices with the manufacturer, and fronts the pharmacist distribution costs). Its the same pfizer etc patent protected medication, unless theres a generic version which chemist & prescriber can vend with patient consent.

You also forgot that you'll have to apply for a Certificate of Need, which (while simplifying) allows other clinics and hospitals in the area to say they think you should be allowed to, and it won't cause them to have too few patients to see...

You're confusing cause and effect. Health care used to be cheap because it couldn't really do much beyond treating some minor injuries and infections. Until about a century ago, what we had was barely a step above witch doctors. Health insurance or lack thereof only started to become a major issue when care delivery started to become more effective and expensive.

> Until about a century ago, what we had was barely a step above witch doctors.

By the late 19th century, we already had general anaesthesia (developed starting in the 1840s), antiseptics (we’ve had them for centuries but their use became much more common in the late 19th century as the germ theory received broad acceptance), smallpox vaccine (very late 18th century development), a number of drugs (some known since antiquity others newly discovered), etc. Yes doctors were a lot more limited in what they could do back then, but even within those limits they saved people’s lives all the time. If your arm had gangrene, they could amputate it under general anaesthesia, antiseptics to try to prevent infection, and provide post-operative pain relief - which could literally save your life. Women with breast cancer received mastectomies (known about since antiquity but became much more common in 19th century, especially as general anaesthesia made the surgery more tolerable)-due to the lack of chemotherapy or immunotherapy, that wouldn’t do much for those with more advanced cancer, but if the cancer was sufficiently localised could be curative and lifesaving

>Want to be a doctor? You've got the aptitude, the knowledge, the mindset, and the will, but a government-guaranteed cartel of medical schools won't let you in, so too damn bad. Learn to code.

Will be consider mostly stupid/irrational, but I'll mention it:

Learn medicine, and practice outside of of the mainstream clandestinely (a past real world example would be abortion clinics on ships). It needs a group of committed/smart people to pull it off, so not easy. Also it cannot be offered to the public at large for several obvious reasons.

As a general rule one cannot involve 'average' people in such an endeavor. All organization settle down to the lowest common denominator. When it come to large organizations in govt/health/etc. they are prone to increasing corruption and bureaucracy if average people are involved.

>Americans have allowed corporations to form massive entities (in health insurance, UHC + optum bank + optima rx comes to mind)

This is more an anti-trust problem than deregulation. In the 80s Robert Bork and some others led a charge within the court system to rewrite federal anti-trust law without actually rewriting the laws. The result was that merger/acquisition guidelines were loosened, and the focus was on whether the result would cause the consumer to pay more money. And thanks to the way health care is paid for, it's a little complicated to make that case.

> This is more an anti-trust problem than deregulation

Loosened antitrust rules are a subset of deregulation, it can’t be any less deregulation than it is a matter of (too loose) antitrust.

If you want to do the hard work of automating and abstracting the "fucking mess" of the financial layer of American healthcare, we're hiring: https://jobs.lever.co/juniperplatform

Or email me: [email protected]

Grr. Genuinely tempting, but I didn't wish it had to be in NY, nor hybrid :(

Huge +1 to that; make remote an option and expand your talent pool

It’s definitely a trade-off.

My team at Stripe was scattered all over, during COVID our company was fully remote, and prior to that I worked remotely on a presidential campaign. All of those were great experiences and, in their own ways, necessarily/understandably remote.

Compared to the early days at Gusto and my own startup, though, in-person has very real benefits that (in my opinion) are worth the challenges in hiring. I don’t know that it will always be true and can’t rule out that we’re wrong.

Having internal users and domain experts there in person makes a huge difference. It’s not impossible to do remotely, and maybe the tradeoff doesn’t make sense forever, but it’s worked well thus far.

I’ve felt similarly. In-person has benefits, but across my career it’s been easier to assemble top-tier teams when hiring remote than in-person.

For myself, I’m past the point of moving for companies. If they happen to be nearby I’ll make it work. If they’re not nearby, its either remote or I’m not at all interested anymore.

I, personally, haven't found many situations where continuous in-person-ness is required for hardware-free, software companies, when the actual 1:1 time necessary to get requirements / etc exceed an hour or so at a time and couldn't be as efficiently done over a Zoom call.

There are obviously huge, huge exceptions to this the moment you add hardware to the situation; or you need something you can't replicate well with screen-sharing.

Addendum: but I'm also mildly frustrated because it's a type of work I would be interested in; but I'm on the other coast, so I can't easily apply :)

Providers determine your rates. Insurers are companies providers recruit to collect their bills. In the entire US health care system, the providers are the only ones whose cash flows are capped by statute. A provider can charge whatever it wants; over 80% of an insurers cash flows have to go to the provider by statute.

(The health care industry is a mess, I agree!)

You seem to be implying that the providers set the prices, but isn't it true that insurers can pick and choose which providers they cover, and because of the large amount of patients they insure, they have a huge amount of negotiation power to exert downward pressure on what providers charge?

No, that's not true. All the market power is with the providers, which is why they're responsible for something like 9x total health care spend in the US than all health insurers combined.

Medicare is better than private insurers at regulating prices (to wit: when Anthem tried to adopt Medicare's rules for anesthesiology comp, they were excoriated, and the governor of New York proposed a statute preventing them from doing it). But they still wildly overpay for services; in fact, what they pay is not really materially different from what private insurers do (it's less, but not by that much).

> All the market power is with the providers

How does that work? Do the providers have cartels that set prices?

Yes. I don't know if that's the primary factor that gives them their market power; it might be even simpler than that. But yes, they absolutely do.

Unless you're Kaiser, in which case you're the insurer and most of the providers, which is the whole idea behind Kaiser. But every other insurer --- and overwhelmingly, Americans aren't on Kaiser --- is beholden to providers. And of course, Kaiser competes with providers for service providers and vendors.

I acknowledge there are issues on the provider side, but it is disingenuous to say that providers set the prices alone. Payers introduce a ton of inefficiencies in billing and also remove money from the system, which negatively impacts care. They implicitly affect care patterns and pricing through denials.

HMOs, for all their problems, have many advantages as well, such as the aligned incentives you allude to.

So, I don't disagree that there are inefficiencies with private payers, but I do disagree that they're significant, or the reason US costs are so high, or that insurers deny so many services. You can see this for yourself with Medicare's admin overhead. Admin overhead is, roughly, the ratio of money spent by insurers to money insurers pay to providers. Medicare has "low" admin overhead --- but that's in large part because they serve the most demanding segment of the market. If Medicare covered 30 year olds, their admin overhead would mathematically be significantly higher: same money in, much less money out.

I agree with you about the efficiency of HMOs, but customers hate HMOs.

A useful Google search: "National Health Expenditures by Type of Expenditure and Program: Calendar Year 2022". It's a single spreadsheet, and it's really something. It covers insurers (public and private), providers (hospitals and outpatient), facilities, state health care programs, even dental, all on one sheet. The numbers are hard to get around.

  inefficiencies with private payers

Inefficiencies like billions of dollars in overbilling annually?

Providers overbill. Insurers inappropriately deny coverage. This is pretty basic stuff. What would insurer overbilling even mean? You pay a fixed premium.

  What would insurer overbilling even mean?

It would mean something like this:

https://www.nytimes.com/2017/05/19/business/dealbook/unitedh...

Or this:

https://www.sacbee.com/news/local/health-and-medicine/articl...

Your second link is literally Anthem passing provider fees (in violation of their contract, sure!) through to customers. The bills were from providers.

Fuck if I know what's going on between Medicare and UHC. It's a mess. Medicare Advantage is a hybrid Medicare/private system; once again, whatever fees were being passed to Medicare, they were coming from providers. Insurers can certainly inappropriately deny coverage, but they don't generally make de novo charges up. Charges come from providers.

Upcoding scandals, which literally appear to be what the UnitedHealth link you provided was about, were exactly what Anthem was trying to control for with its new announcement.

Medicare Advantage is a capitated program. The provider fees aren't being passed through to Medicare.

Then why isn’t everyone on Kaiser? Because they’re stupid?

Providers is also kind of vague. You show up at a hospital, does the nurse practitioner who does your intake set the price of your ER service? Who specifically sets the prices?

UnitedHealthcare operates in DC and all fifty states and has north of 26 million customers. Kaiser operates in eight states and DC and has around 12 million customers. It's safe to say plenty of folks use Kaiser when it's available.

The downside is that because Kaiser operates as an HMO, any specialists you need to see must be approved by your primary care physician (typically GP, ob-gyn, or uro). They have an abysmal record with mental health, and folks who need chronic non-routine care often struggle to get that care. If all you need are routine checkups, cheap prescriptions, routine immunizations, etc. they're quite competent.

  Who specifically sets the prices?

Kaiser is a vertically integrated HMO. Like other HMOs, to get coverage (with a few exceptions) you need to see a provider within the (Kaiser) network. As a vertically integrated HMO the providers in the Kaiser network are all employed directly by Kaiser. So Kaiser sets the its own employee compensation.

It's worth noting that all insurance companies are required to emergency care at any provider as if it were in network. If a Kaiser member were to go to a non-Kaiser ER they would see the same cost as if they'd gone to a Kaiser ER. Whatever Kaiser pays to the out of network hospital/staff is almost certainly negotiated beforehand.

  to wit: when Anthem tried to adopt Medicare's rules for anesthesiology
  comp, they were excoriated

For everyone in the back: that's not what happened. BCBS tried to place arbitrary limits on anesthesia payment. Medicare does not do this. Physician complaints with Medicare payments revolve around the hourly rate. Physician complaints with BCBS revolve around arbitrarily setting a hard limit for the amount of time a procedure is allowed to take. One is limiting cost, the other is limiting care.

No, that's precisely what they didn't do. Medicare has a schedule of anesthesia compensation rates broken down by procedure; the last time this came up on a thread, the schedule was literally posted. Anthem announced they were using it.

Yeah the last time this came up I posted the CMS handbook. If Medicare operated the way you falsely claim there would be an outcry similar to that over BCBS's behavior. BCBS was proposing something entirely different from how Medicare operates.

Clearly not, because this is how Medicare operates. In fact, it's the whole premise for why Medicare is meant to bring prices down!

I am an anesthesiologist. This is false. We bill 1 unit every 15 minutes, and then we receive startup units on top. A gall bladder removal is 7 units and often takes an hour. So we would receive 11 units for that hour. If it takes 2 hours we would get 15 units. If it takes 3 hours we would get 19 units.

There is no cap for billing, but realize when an operation goes long it not only means we make less per hour, but there is also usually a good reason for that. Even if there isn’t a good reason, it’s not like we have control over how fast a surgeon operates.

  Clearly not, because this is how Medicare operates.

Yeah, we've been over this: Medicare does not set arbitrary caps on the length of a procedure. They pay for anesthesia services from the time the patient goes under to the time the patient wakes up.

  In fact, it's the whole premise for why Medicare is meant to bring prices down!

In fact, it's not. Limiting care is pretty much the opposite of how Medicare operates and you can see this reflected in the claim denials. For-profit insurance companies deny claims at 2–3x the rate of Medicare because they are incentivized to deny care.

From Medicare's policy manual:

https://www.cms.gov/files/document/chapter2cptcodes00000-019...

  A unique characteristic of anesthesia coding is the reporting of time units.
  Payment for anesthesia services increases with time. In addition to reporting
  a base unit value for an anesthesia service, the anesthesia practitioner reports
  anesthesia time. Anesthesia time is defined as the period during which an
  anesthesia practitioner is present with the patient. It starts when the anesthesia
  practitioner begins to prepare the patient for anesthesia services in the operating
  room or an equivalent area and ends when the anesthesia practitioner is no longer
  furnishing anesthesia services to the patient (i.e., when the patient may be placed

Now I made a good faith look through your comment history to see if you'd actually posted anything like that. Barring something I missed I can only assume you're working based on an incorrect assumption of how Medicare pays for the cost of anesthesia.

There is a fixed component per procedure (base unit). This is based on the complexity of a procedure and roughly how long it's expected to take. That is why CMS would track how long a procedure is expected to take. There is a time based factor (time unit), and that is not limited in the way that BCBS was proposing.

It's there in black and white on the other thread, down to the individual surgical procedure.

Later

(The comment I replied to was edited extensively after I replied to it.)

> Very difficult to disrupt American healthcare when health insurance companies determine your rates,

This isn’t unique to America. In countries with government healthcare, the government determines your rates. Typically government rates are lower than private insurance rates in the US, too.

For as much as Americans like to complain about insurance companies, we actually get a lot more care and pay higher rates to providers than other countries. There’s a reason doctor pay in the United States is so much higher, among other things.

What on earth

We get a lot more care, pay higher rates, and have worse outcomes.

That last bit is why people are pissed.

I think we should add that the outcomes are worse at _all_ socioeconomic levels. The rich get screwed over as well in this system as well. It's unfortunate that so many of them have better overall outcomes and/or myopic experiences that many are emotionally invested in being _able_ to pay exorbitant amounts for more personalized care - regardless of the societal consequences - as an interpretation of "freedom."

But hey, it's not like the US is a democracy exactly given that public opinion generally doesn't translate into policy changes anymore.

I don't think it's settled fact that the US has worse health outcomes. In fact, most data I see points to the opposite. Some people point out very lazy metrics like life expectancy while ignoring that 72% of Americans are overweight or obese according to the CDC. Rearrange healthcare/government insurance models all you want; it can't fix that.

Life expectancy is still lower in the US than in western Europe.

But engage with the point OP's making. That is despite spending far more on healthcare, so maybe the problem isn't the healthcare?

Life expectancy in general in the US could also be due to the amount of gun violence, as well. Nothing to do with the quality of healthcare.

Managing chronic disease burden is a component of healthcare

The fact that Americans intuit that it’s not is a worrying sign of just how broken our system is

> Americans intuit that it’s not

Any evidence for this?

Your comment and GP? Both predicated on separating “high chronic disease burden” from “poor healthcare system performance.”

I don’t think this is a broadly held belief, I think it’s the “eeehhrm actually…” contrarian belief that’s trying to discredit the consensus view that our healthcare system gets very poor results for the money. So it shows up in places like this exact HN thread.

Sounds as though you're now not saying that Americans as a group think that. That's good.

In western Europe, governments have a vested interest in the good health of their citizens, because a healthy citizen costs less to the healthcare system.

The US government does not care that much about obesity, gun violence and all that jazz because it is not the one paying for the damages it does.

All these factors contribute to the comparatively poorer life expectancy of Americans, which is, I agree, only a surface metric.

The government does end up paying for this via Medicare and Medicaid but doesn’t have good levers to solve it directly.

The more important dynamic you’re pointing to is that private insurers don’t care because our insurance is tied to our employers and therefore is expected (by insurers) to churn every 4 years or so.

It literally makes zero sense for a private insurer to invest in an American’s healthcare results more than 3 or so years down the road.

Surprise surprise, we have best-in-class care for emergencies and complex acute cases, and absolutely atrocious management of early disease and lifestyle problems (which is when it’s most cost-effective to solve health problems).

Uhhhhh obviously managing chronic disease burden is a core feature of a functional healthcare system.

One of the strongest levers we have to improve the “inputs” you’re describing is a better primary care system. America’s has been absolutely gutted over the last 20 years by interactions of various economic and regulatory dynamics including (notably) the anti-competitive vertical integration of pay-viders and pay-vider+PBMs like UnitedHealth Group.

It is absolutely not true there aren’t system-level changes we can make in healthcare and insurance to help address this.

Yes managing chronic disease is good and important but there is no healthcare system that is so good it can outrun an obese population. The healthy population will always do better than infinity spending and care on a sick one.

It seems like you’re either ignorant of some basic facts about healthcare or are willfully missing the point (true to the username I guess) so I’ll be more explicit:

Having access to doctors helps to manage disease.

Obesity is a disease.

In particular, having access to PCPs helps to manage obesity.

Our healthcare system yields poor access to healthcare.

In particular, it yields poor access to PCPs.

Ergo the obese population is in part an output of and not an external input into the design of our healthcare system.

Ergo changes to the healthcare system absolutely can — and in fact should have as a key goal to — yield changes to levels of obesity.

> “ Rearrange healthcare/government insurance models all you want; it can't fix that.”

This claim is false. The mental model of an obese population being exclusively an input into our healthcare system does not track with what we know about the relationship between healthcare and obesity.