Hacker News new | ask | show | jobs
by gshulegaard 3514 days ago
That's a red herring, just take a look at some budget breakdowns:

https://www.nationalpriorities.org/budget-basics/federal-bud...

The largest portion of our budget is mandatory spending (~65%). Of our mandatory spending, the largest portion of that is spent on Social Services (Social security, medicare and health, etc) and yet we still have worse services than almost any other western country (IMO).

You start looking at percentages and an even more sinister picture starts to take shape:

https://visualeconomics.creditloan.com/how-countries-spend-t...

> "Canada spends 6.3 percent of its total yearly budget on military spending. The United States spends 19.3 percent of its budget on military expenses. Mexico uses 3.3 percent of its budget for military spending."

> "Canada spends 17.9 percent of its total yearly budget on health care. The United States spends 19.3 percent of its budget on health care expenses. Mexico uses 11.8 percent of its budget for health care."

> "Norway spends 17.9 percent of its budget on health care spending, while its neighbor Sweden spends 13.8 percent of its budget on health care."

> "In France, health care spending is 16.7 percent of France’s yearly budget."

This article needs citation, but see this report that seems to at least tangentially support some of the trends voiced:

http://www.oecd.org/els/health-systems/Briefing-Note-NORWAY-...

> "The United States is, by far, the country that spends the most on health as a share of its economy (with 16.9% of its GDP allocated to health in 2012)"

So at this point we can conclude that the US spends roughly the same share, or more, of it's GDP on Health care as other countries...even those "socialist" ones...yet we have a much worse standard/level/cost of care.

Even at our "lower" tax rates our GDP is by far and away the largest:

https://www.google.com/search?q=list+of+countries+by+GDP&oq=...

But moreover, our PER CAPITA GDP is one of the highest in the world (higher than Norway and Sweden).

So at the end of the day, America:

* Spends more on healthcare in flat dollar terms than almost any other nation

* Spends more on healthcare PER CAPITA than almost any other nation

and yet we still have far worse levels of care.

So this problem has nothing to do with economic or tax policy in the US. The question is: Where is the enormous sums of money we are ALREADY pouring into the system going?

5 comments

Most Western health systems are universal and more or less exclusively government-funded. This means that the entire population is in the same risk pool, reducing costs for the more vulnerable users and increasing the incentives to implement more preventative medical practices. As de facto monopolies, these systems can do a much better job of controlling the costs of salaries, equipment, and drugs. And, because the systems don't need to turn a profit, they can operate at cost.

Our private health care system, however, has a cycle of perverse incentives -- employers, insurers, patients, and doctors -- that leads to spiraling costs with no increased benefits. The populations with the highest health risks (i.e. costs) are shoved onto the public rolls, in the form of Medicare, Medicaid, and the VA. Meanwhile, the lowest-risk populations are forced to pay into private, for-profit insurance schemes. Specialists have outsized bargaining power, which leads to grossly outsized salaries. Equipment and drug manufacturers can play hospitals and systems off of each other to bid up prices. And, of course, shareholders want a return on their investment.

This problem has everything to do with economic and tax policy in the US.

I think the point I was trying to address was the implied claim that we "can't afford" health care systems akin to other western examples. Arguments like:

> "Your tax rate is so high America would never vote for a similar tax."

> "Percentage wise those countries spend a lot more on health care than the US."

I would agree that our private health care system has perverse incentives. Combined with the degree of separation between cost and consumer due to our insurance system, this has resulted in general market failure.

Neither of these are directly economic or tax policy related (IMO). We already are being taxed and paying for health care...the issue is where is our health system failing to deliver value-per-dollar spent. Which generally might involve some economic policy overlap as far as market regulation, but I don't think it is the whole (or even the majority) of the story.

Corruption, lack of a single payer system that dramatically increases efficiency in the "socialist" countries. Insane health insurance system (ties into corruption).

It's doubtful they can/will fix any of this. America is a country controlled by lobbyists.

The politicians don't matter at the end of the day, look at Obama, had the right idea, could only implement a relatively mediocre system because anything good was politically untenable. The fact that politics can trump (lol) the health of the nation is enough for me to never want to live there.

American healthcare is run by the private sector with pretty much zero accountability compared to say, the UK, where the NHS is for the most part, a public organisation with open books.
You're fronting the overhead of medical R&D, which the US is doing the bulk of.

Still kind of ridiculous that the amount we spend still amounts to most of the population getting shafted.

Are we?

> ...industry supplies the bulk of the funds devoted to research and development, the public sector—primarily the National Institutes of Health (NIH)—supports most of the nation’s basic biomedical research.

http://content.healthaffairs.org/content/30/2/332.full

This quote seems to indicate the majority of R&D is coming out of the private sector.

Moreover, this overhead of medical R&D from the public sector doesn't explain price differences in drugs between US and other developed nations:

http://usuncut.com/news/us-drug-prices-in-the-us-are-literal...

http://www.wsj.com/articles/why-the-u-s-pays-more-than-other...

There are deeper, systemic issues IMO.

I wonder what would happen if the U.S. passed a law requiring that drug prices in the U.S. be no higher than anywhere else in the world. That is the drug company is free to set any price, but they cannot sell at a lower price outside the U.S.
Wouldn't it be dramatically easier to just allow Americans to buy their drugs from other first world countries at the prices they pay? If American drug companies have to compete with extra-national pricing, I'm guessing they'll figure out a way to.

On top of that, you're not forcing anybody to do anything.

No I mean specifically from the private sector. You have to front that cost somehow. Whether you're seeing the cost as more expensive drugs or whatever, you're still paying it. R&D is factored into the cost.

The negotiation process is just different than when other countries are negotiating with US pharmaceutical companies.

>So this problem has nothing to do with economic or tax policy in the US. The question is: Where is the enormous sums of money we are ALREADY pouring into the system going?

The pockets of the oligarchy represented by Clinton and Trump.