[throwawaydbdksn]

The problem is everyone gets paid too much. Our doctors salaries are far out of line with most countries , we have the strictest drug pricing laws in the world, and people love to sue. We also have a significant portion of the population paying no medical bills while the rest is overcharged to compensate. On top of that our health insurance is full of middle men like "PBM's" that do nothing but raise costs.

The combo means docs, drugs, treatment, and insurance are all more costly.

A fix is hard to come by but would work something like this.

1)subsidize the cost of medical school increasing supply of MDS 2)pass laws to protect physicians from frivolous lawsuits or at least limit damages. 3)disallow drug companies from advertising, ban rampant kickbacks to doc's that prescribe their drugs 4)ban anti competitive practices that prevent insurance companies from negotiating prices directly with manufacturers. 5) provide healthcare centers of last resort(the ER) compensation for patients unable to pay.

My last point is state specific and really controversial but it's based on what I've personally seen.

States with a lot of illegal immigrants spend an enormous amount for healthcare at the ER for these people. Around 1/4 of the people that came into the ER I was familiar with were likely illegal and over 90% either gave a fake name or never paid. The majority of those costs are passed on to those with insurance. I lived in an area with probably 3% of the population were undocumented.

Since the ER is healthcare of last resort they are forced to treat you even if you give them completely false info with no intention of paying. Illegal immigrants know this and preferentially go to the ER because they get treated without probing questions or need to pay. They also already have fake ID's in most cases so giving one to the hospital isn't a big deal. This enomous cost gets buried because it's politically unpopular to say and because the hospital just raises prices in everyone else to compensate.

[hellohappy1234]

I'm an ER Doc. The focus on illegal immigrants is way off base.

There's a law called EMTALA which is basically an unfunded mandate that says, in part, we can't just turn away patients because they can't pay. This was because slot of hospitals (university of Chicago in particular) were dumping or transferring patients to other hospitals who couldn't pay and making huge news stories. As you mention, this means people who can’t pay get free health care.

Who does this end up being? Almost 100% alcoholics and homeless patients, often with severe mental illnesses. When there are no resources for them, they end up taking ambulance rides to the ED, say they have Chest pain, and then we give them thousand dollar workups that you end up paying for. Illegal immigrants at large county hospitals are often grateful for any care and usually actually do end up paying at least some portion of their bill, and often are not super high utilizers.

For example, do you know who the number #1 utilizer of NY state medicare dollars is?

http://nypost.com/2009/07/12/hosp-itality-abue/

Trust me, if hospitals could sort out paying from non paying patients they'd do that in a heartbeat (if they have one). There's lots of programs that try to draw those sorts of patients in, like international elective procedure patients and elderly patients who are universally paid for by Medicare.

[throwawaydbdksn]

Doc, this was really well written and I can't refute it at all. Maybe I was a bit too racist here, lesson learned

[csydas]

Alternatively, increased free clinics for basic healthcare (flu, checkups, non-emergency procedures) could eliminate a large percentage of wasted effort and time. Free regular checkups just a few times a year would catch so many issues before they became big expensive issues and it would eliminate the use of the ER as a general physician visit.

We're already paying out crazy amounts for doctors time and for expensive visits, might as well make the basic health checks free. No need to bring insurance in on matters like just having a doctor write "you have the flu. Rest 4 days and take this" when the entire operation is 15 minutes for a quick culture.

[analog31]

Doctors salaries don't tell the whole story. I've read that roughly half of doctors are self employed. They are also the owners, or major shareholders, in medical related businesses such as provider networks and malpractice insurance companies. Being a doctor means that you can make what I call "insider investments" that aren't available to the public, and the cost of training ensures that the only people who are doctors, have family money available to invest in those businesses.

The rat's nest of business entities makes it impossible to figure out where the money is going, or who is making how much. That way, everybody can point the finger at somebody else. I suspect a reason why medicine costs less in countries with nationalized systems is that it's possible to figure out where the costs are going.

I'd favor a system where medical school is free, and doctors work as employees of the government.

[davak]

One brief clarification. Doc salaries are higher, but cost and length of training is higher too. Four years of college and four years of med school dig the hole very deep. Then three to eight more years often working below minimum wage as the interest on the debt compounds.

[throwawaydbdksn]

Medical school definitely needs to be less expensive to lower salaries. It's also pushing doctors towards specialities that pay more and leaving us with a thortage of GP's

[gech]

Did they have a choice in their career path?

[ubernostrum]

pass laws to protect physicians from frivolous lawsuits or at least limit damages

Several US states have harsh caps on medical malpractice damages. They still see massively-rising medical costs. And in uncapped states the rate of growth in malpractice damage awards hovers very close to the rate of inflation of the US dollar.

Which sort of destroys the argument that "frivolous lawsuits" and massive damage awards drive medical costs in any significant way.

[coredog64]

It's less the actual damages as much as it the defensive medicine that occurs because of the constant risk. If you show up with the flu, but it could be some weird disease that shows up in an MRI, the incentive for the doctor is to get you an MRI.

I used to believe in caps, but I think we could do better than that. Create a no-fault insurance market that pays people without the hassle of civil trials. That has the potential to allow medical professionals to be more open and honest about mistakes they make (similar to the aviation industry). That, in turn, would allow for data-driven decisions about how to make the biggest improvements for the lowest dollar amount.

Oh, and while we're at it, how about a self-driving unicorn that runs on rainbows...

[hellohappy1234]

100% agreed with this. This is an insightful comment. people have no idea how much practice patterns would change if less defensive medicine could be practiced. So much of the inconvenience of medicine exists because the standard of care is extremely conservative to ensure minimal risk of litigation. The few states that have malpractice caps really doesnt change anything--those states just provide a good practice environment in rare situations, but doesn't change the way that standard medicine is practiced because that is developed out of state as a national consensus.

[jdboyd]

If MRIs were priced at what most people would call reasonable, then that defensive practice wouldn't be as big of a problem. We've seen prices of $100 to 300 mentioned for some other countries.

[hellohappy1234]

Its not about frivolous lawsuits as much as defensive medicine which is the standard of care. For example if you come in to the Emergency department with a traumatic brain bleed (even a tiny spec on your scan), then you end up getting another scan at 6 hours, likely platelets since you took a baby aspirin that day, a very expensive neurosurgery evaluation, keppra for 2 weeks, and continuous monitoring, even though by all metrics you have a very benign pathology. Why? Because this is the standard of practice. Not because it makes any sense.

also, keep in mind that the factor that matters the most for practice patterns (especially defensive ones which drive up cost) is not where a doctor practices, its where a doctor trains. Since most doctors train in high risk litigation environments, and most standard of care procedures are developed with defensive practices in mind, the standard of care is high cost high utilization medicine.

Source: ER doctor

[throwawaydbdksn]

I don't need to make an argument. Call your doctor and ask him how much he pays for his malpractice insurance.

I used to know some people in healthcare tangentially and the answer is $50,000 to $250,000 A YEAR depending on specialty etc.

Sometimes the practice will pay these costs for you, so the doctor might not be paying it directly but the money is coming from somewhere.

My friends told me malpractice insurance was generally about a third of your salary. And this includes people like pharmacists and physicians assistants too. So if much higher than world average doctor salaries in the US are any part of the reason for high medical costs, lawsuits are a third of that

[ubernostrum]

I used to know some people in healthcare tangentially and the answer is $50,000 to $250,000 A YEAR depending on specialty etc.

And... inflates at a rate which appears to be completely unrelated to malpractice damage awards. So calling for caps and limits on malpractice suits would not solve it.

[gech]

Consumers need protection from doctor's mistakes, plain and simple. I don't need to make an argument either. Call someone who has lost their child to a doctor's mistake.

[zepto]

Consumers pay for this so-called protection through higher costs, but what good does it do?

Call a person who has lost their child to a doctors mistake and see how the 'protection' has worked out for them.

[gaius]

subsidize the cost of medical school increasing supply of MD

Won't help - the constraint is that the AMA is a closed shop (same as the BMA in the UK) and won't allow the market to be flooded like that.

Meanwhile we computer folks sit back and let outsourcing and offshoring eat our industry.