But that’s the thing - any of these “solutions” only further enables them as freeloaders. It just dresses it up so they dont feel bad about it; it provides them cover from the stigma of their deadbeatedness.
That may be why there such controversy over this - not the availability of healthcare, but all the effort being put creating the illusion of self-sufficiency for those (potential) deadbeats rather than simply calling it charity. Everyone should be able to see a doctor, but not everyone is entitled to the perception of equal means to do so.
If you polled 1000 people about the goals, need for healthcare reform or asked people why they favor Medicare for all I doubt you’d get a single person who will cite the need to create the “illusion of self sufficiency”.
Yet if you ask those 1000 people to chose between “something-for-all” or fully funded (ie, meets the community’s needs) free clinics for the uninsured, they’ll all also chose the “for all” option - and when asked why, the primary reason will be how the “free clinic” delivery model is demoralizing and creates an unfair stigma against the users, and how some people are too proud to accept charity and thus wouldnt benefit. Of course they wouldnt cite “the need to create an illusion”, the whole thing is being pressed because it’s perceived to actually create self-sufficiency (How many people have praised the ACA because they can now afford health insurance? Of course, ignoring that most, if not all, their insurance premiums being subsidized is the only way it helped them “afford” anything.)
It’s like food stamps. Perhaps there is also a cost savings through the system, but an oft-cited benefit of the switch from paper vouchers to debit card-like payments is that using those benefits is now more discrete, the recipient standing at the checkout stand appears to be making their purchase like anyone else. The illusion of self-sufficiency.
No you’d get a large % who chose funded free clinics.
You’d probably get 5-20% who chose “undecided”
You’d get 30-45% who chose “neither”
On the other hand even 15% of Republicans currently “strongly favor” Medicare for all. That is at least until you explain what it is, how it works and who pays…
I’m not sure about the actual impact. It seems rather high to be 75%. But there is some truth to the mechanics described and I have little doubt that it would lead to significant cost savings.
I know when we switched from a traditional plan to a HDHP with HSA, we’ve become way more conscious about the costs. Before it was" “Who cares how much it costs, our copay is a flat $20.” Now it’s more “Do I really need this checked a third time? How much is that gonna cost me?”
And we’re now looking up if doctors are rated as having above average costs, etc… before going for a visit with a new specialist because until we’ve reached our deductible it’s about as close as we can get to comparison shopping. If upfront price disclosures were mandated, it’d take this comparison shopping to another level I’m sure.
The lack of skin in the game is amazing. Due to some kid sport injuries, we reached our max deductible ($3k) this year. After that happened, we’ve been way more relaxed about follow up visits and extra procedures because they were essentially free to us. We’re also moving up some procedures to happen before the end of the year just because they are free to us. It definitely alters your behavior.
So combined these measures would definitely have an impact. 75% sounds a bit too good to be true but it’s not like if further measures could not be implemented if this was not sufficient. And for example price disclosure would not be incompatible with whatever new system the country decides is better than currently.
This is only an issue because of the massive – and unjustifiable, IMO – price differences between doctors and facilities. It’s understandable that doctors and facilities with better outcomes, better experience, etc. can justifiably charge higher prices, but beyond a certain point it’s just gouging that could only occur in a dysfunctional system like we have.
Maybe that’s over-testing, maybe it’s not. Hard to say without more info (and hard for me to say even with that info, as I’m not a doctor or other medical professional and wouldn’t have specific knowledge about your case).
Quite frankly, I’m tired of hearing this “skin in the game” nonsense when it comes to medical care. Your health is at play. Is that not enough skin in the game?
What you described is not a functioning system that does a good job of controlling costs. On the contrary, you illustrated perfectly how the absurd levels of cost-sharing that are so common now can actually increase overall costs. Sometimes one (in consultation with their doctor(s)) might take a “wait and see” approach to something – this test, procedure, etc. (that counts towards your deductible) could be justified now, but let’s wait and see just to make sure. If you happen to hit your deductible, it makes perfect sense to consider getting such services done before the year is up and only pay (depending on the plan design, but typically) the coinsurance (or even nothing if you also hit the OOP). But had you and your doctors continued monitoring, you might not have ended up having the services done at all.
If the deductible wasn’t a consideration – if you knew the cost would be the same whether you had the service(s) done now or next year (or later) – you’d continue monitoring.
It’s not even always services that were known in advance. It’s not unheard of to ask your doctor “I’ve hit my deductible this year; is there anything you think might be worth doing now while it’s only going to cost me 20%?” This will often result in testing and other services that, while technically medically justifiable, wouldn’t have been done otherwise. I suspect many – maybe even most (if they have the financial means) – people do this. It’s perfectly rational behavior for an individual. If insurers (including self-insured employers) don’t like that, they should stop screwing people with onerous cost-sharing.
Yeah, the same study that said M4A would be cheaper than continuing with our current system.
The “increased federal spending” argument is a bad-faith argument. The federal spending replaces current private spending, so the appropriate comparison is the net new spending (or net savings). Who cares whether the line on their pay stub says “Medicare tax” or “health insurance premium,” if they’re still saving money?
No actual reason we couldn’t get drug prices down to what other countries pay. And how many of these drugs that are expensive in the US and more fairly priced elsewhere are actually the result of taxpayer-funded R&D?
Once again, assumes operating costs will remain the same. They won’t. Conduct an analysis that takes into account the administrative efficiencies from dealing with a single payer, the elimination of uncompensated care, and the increase of current Medicaid payments. Maybe the result will still be lower incomes, or maybe it won’t, but anyone trying to have this conversation without conducting such an analysis is simply not doing so in good faith.
I mean, the rest of the developed world has managed to do it…
There are valid concerns about Warren’s wealth tax plan, but that’s just Warren’s plan. It’s not something intrinsic to M4A. (A serious concern I have about it is how to value illiquid assets. Publicly-traded stocks, bonds, etc. can easily be valued, but how do you value things like privately-held businesses where there is usually a lack of market data? It sounds like an administrative nightmare.)
Of course the author of this piece is from Mercatus.
“Find other jobs” and “let them eat training” was the answer given to other categories of workers. If these workers get more, that sounds generous. Remember, these jobs are effectively make-work jobs. The jobs have the same social benefit as hiring people to dig holes and fill them back in, i.e. none at all.
Drug development is not an easy problem. Right now, most of the profit motive for drug research comes from the large profits to be made selling expensive drugs in the US market. We are the richest market, so isn’t it “fair” ala M4A logic, that we should pay more? Overseas markets often can’t or won’t pay as much, either due to their relative poverty or lack of respect for US IP laws, so those markets are charged less and bring in much less profit.
The thing is, that without the profit from the big blockbuster drugs in the US market, tons of drug research wouldn’t be done by private companies. Cutting drug costs by 70% means you’ll see very little new drug pipelines.
Now you can propose that research grants might help academics work on this, but there’s a ton of work involved in FDA approval, many rounds of drug trials, etc, that aren’t done by academics and are necessary in our current process to bring a promising drug through the safety and efficacy approval processes. Who is going to do all the same work for 1/3 the payoff? Or more likely maybe now they only do it for drugs that pay 3x more than the old average, and everyone with less profitable problems, ie those with a less than huge Total Addressable Market, just get sick and/or die since it’s not worth finding drugs for them since the Government decided that to cut costs they weren’t worth it.
Trusting the government to find and care about hiring people to do this work instead seems like a recipe for waste and poor progress, since they don’t have an incentive to find or pay for the best people to work on promising new drugs. More likely it would end up like the TSA where their job is to act like they’re doing ”something” to address a political issue, regardless of the actual outcomes or whether the money was well spent for the outcomes generated.
More broadly, the US is subsidizing drug development for the rest of the developed world. Is this a problem? Maybe, but what would the solution look like? Export restrictions for drugs to make sure the poor in other countries have to pay the same price? If everyone paid the same price, the price for us could be lower, but then it would be higher for others. Enforcement would be a logistical mess with black markets and such, and that’s even if most of the rest of the world was willing to go along with an idea that was not in their national / locals interest.
Or in the case of Europe, Japan, Canada, Australia, etc all the other prosperous nations across the world they pay less because they negotiate lower prices. Simple capitalism that we’re failing at.
THose nations add up to more than the US pays even with our grossly inflated prices.
US is 33% of worlwide drug revenues. IF we cut our spending in 1/2 that would drop worldwide revenues just 16.5% I think the industry could survive that. They spend 10% or so of their money on TV ads…
Canada was my guess. To be fair, while the Canadian system does seem to have its problems in some areas, Canada is also physically larger than the US while having a population lower than California. Those are challenging conditions for a healthcare system. It’s quite impressive that they get the results they do for as relatively little as they spend; some countries with similar conditions (e.g. Norway) spend more (but still a lot less than us) and do tend to have overall higher satisfaction.
Most (65+) of which are on Medicare, I assume? (though to be fair, that may also mean Medicare Advantage)
Exactly. The “US drug prices are necessary to fund R&D” claim has been repeatedly debunked (e.g. here) over the years. Prices are higher here because drug companies can get away with it. The most egregious instances seem to be in old/mature drugs where R&D costs couldn’t possibly explain the increase – e.g. EpiPen (currently ~$350 for the fake generic, but NHS pays under $100, and I personally know they were ~$100 here just 10 or so years ago), various forms of insulin, Shkreli’s shenanigans.
Direct-to-consumer advertising of prescription drugs is another problem. Directly banning such advertising will probably run into 1A challenges, which I’d guess have a much-higher-than-zero chance of being successful in the current environment, M4A would provide another leverage point: Medicare could prohibit, as a condition of a drug being covered by Medicare, such advertising. (Current Medicare probably has enough leverage to do this, so M4A isn’t strictly necessary, but it wouldn’t hurt.)
Another issue is doctors basically taking payments from pharma companies for pushing meds. According to Open Payment Data, that amounted to $9.35B last year alone. National mean is over $3k/yr in payments per doctor. That is a cost directly passed to customers and that should be curbed dramatically.
You’ll need a much better article than that one to claim the “fund R&D” argument is debunked in my book - the author just looks at US premium of sales vs R&D, as if the cost of the drug manufacture, staff, overhead, and cost of capital to do all this were free. I’ll take AbbVie as a middle of the road example from that 2015 study.
(rounded to $B from their 2015 annual report)
Revenues US $14 (US “premium” is half, $7 of this per the article)
Revenues Int’l $9
Revenues Total $23
Cost of Revs -$5
SG&A -$6
R&D -$4
Interest expense -$1
Taxes -$2
Earnings +$5
So if you take away the extra $7B AbbVie got from charging higher prices to US vs EU, they would have lost -$2B that year instead of making +$5B. 2015 was a pretty good year for them too - earnings for 2014 were only +$2B for example on $20B in revenue ($11B US), so if about half say $5B was “premium” again for 2014 similar to the premium for 2015, they would have lost -$3B (R&D was $3B that year). Keep doing that each year, and they will not exist as a company.
As such, it’s entirely reasonable to conclude that if they only charged EU level prices to the US market, they would have to raise their prices significantly on the EU, de-fund all or nearly all R&D, go out of business, or otherwise drastically change their business model since the numbers just wouldn’t work. AbbVie has $40B in debt as 2015 too, so they’re using a lot of borrowed money just to try to make the current business model work.
Yes, I agree with most of this and followed the EpiPen and Shkreli situations closely. Nominal prices for products entirely covered by insurance (minimal OOP to customers and uninsured sales) is basically a bunch of funny business with inflated numbers that no one pays. This is a done in order for one drug company to try to inflate their share of the collective drug budget of the insurance companies vs the other drugs, so it’s an arms race towards higher prices that then get negotiated down but hopefully with more for them than their competitors.
Specifically regarding older small market drugs and price jacking, the FDA approval process for new genetics is at fault here for allowing monopolistic abuse. New generics had to pass a comparative test vs the existing generic (to show similar performance, not unreasonable), but once a company had bought an exclusive right/monopoly on the approved generic, they could refuse to provide it to a competitor to do the required FDA study, and presto - no competition.
On the bright side, looks like some price transparency may be in the works, at least for hospitals. Hopefully this will lead to more disclosure of cash and negotiated prices, as well as price competition at least for non-emergency healthcare services.
Isn’t this at the center of the issue though? Why do we have to accept that they can charge way more in the US than in the EU? I wouldn’t mind if prices increased in the EU while ours decreased to parity instead of feeling like we’re subsidizing healthcare in the EU by accepting to pay more.
I don’t know as much about the EU political considerations. One might hope the drug companies had negotiated for as much as they could charge in those markets. As such, suppose the EU won’t pay more - what happens then? If you decide there will be only one price, now you either lose all the EU sales if you set the price higher than their current rate (EU sales are nearly as much as the US in total, by revenues), or you cut the price in the US down to that level or lower. Either way, my example drug company is now meaningfully unprofitable. It is better for them to charge less and still get those EU sales, which is why they do it presumably, even though it generates bad PR here and blackmarket reimportation issues.