[nolongerlowres]

I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really common with private healthcare in the United States too - we’ve just shifted the burden of cost of treatment/quality of life decisions to private entities who typically are only interested in furthering shareholder value. To give a personal anecdote as well: A close friend of my wife’s had to fight and fight to get insurance to cover appointments in order to get her breast cancer diagnosed.

I would like to understand if the world really does rely on US private-healthcare funded research - I’ve heard this argument mentioned before and have always been curious about it.

[ppf]

Agreed, the US system is flawed. I suppose with public-funded healthcare, everyone is on the same level - the survival rates of breast cancer and bowel cancer is the same for all (unless you can afford to fly to the US and pay for care there).

[rockinghigh]

There can still be large variations across hospitals and doctors in a public system in terms of outcome.

[grkvlt]

In the UK there is the Wellcome Trust [0] which is a non profit healthcare research body, and I believe other organisations like this exist. They would seem to be the ideal place for this type of work?

0. https://en.m.wikipedia.org/wiki/Wellcome_Trust

[AnthonyMouse]

> I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really common with private healthcare in the United States too - we’ve just shifted the burden of cost of treatment/quality of life decisions to private entities who typically are only interested in furthering shareholder value.

Having a profit motive is only a serious problem when there is insufficient competition. Otherwise companies that try to make outlandish profits would lose business to companies that offer better coverage for lower premiums by taking smaller profits. Insurance company profits are only a single digit percentage of US healthcare costs; eliminating them wouldn't make a real dent anyway. (In many cases the "profits" are also unavoidable. For example, if the insurance carrier owns its building then the internal rents are "profit" but if you want to replace them you would still need a building and then have to pay for it from somewhere else. Every dollar you spend on anything is profit to somebody.)

And a profit motive will in general tend to lower costs, because a company that can eliminate waste and then charge lower premiums for the same coverage will get more business and make more money. There are a lot of reasons it doesn't work out that way for US health insurance, e.g. when it's provided with employer subsidies under tax incentives it reduces competitive pressure (employees can't choose another insurer) and the tax incentives reduce price sensitivity. But a big one is this:

> I would like to understand if the world really does rely on US private-healthcare funded research - I’ve heard this argument mentioned before and have always been curious about it.

The basis premise behind the patent system is like this. It takes a lot of money to do R&D and it may not even turn into anything, but once it's public knowledge, everybody starts making the thing and not just the party who paid for the R&D. Which makes it a lot more profitable to wait for somebody else to do R&D and then go into competition with them than to do the R&D yourself, so then nobody has the incentive to do it. Patents say if you do the work you get a temporary monopoly on selling the thing to give you some time to recover your R&D before competition drives down the price.

In principle this allows the market to set the price. If you invent a more efficient light bulb, you can ask $1000 for one but no one will pay that much even if you have a monopoly, they'll just buy the old light bulbs. But you might be able to charge as much of a premium as your light bulb will save in electricity over the existing ones and still find buyers.

With drugs the incremental value is often very high -- it could save your life when the alternative is that you die. Which is what you want to happen, because you want a large financial incentive to do R&D that can save lives. But then the cost can be really high which makes people want some kind of insurance.

When you have private insurers in competition with one another, you still basically have a market. If the drug maker demands a trillion dollars to treat one patient, any insurance company willing to pay that would have to charge premiums nobody can afford, and then nobody would buy that insurance and the drug maker would get no sales. So there is a limit on what they can charge, but it's still pretty high, because people really want their insurance to cover those drugs and will strongly prefer insurance carriers that do over those that don't. And then you get the large financial incentive to do life-saving R&D as desired.

With a single payer system, that competition between insurers doesn't exist. If the system refuses to pay the maker's price for a drug, the system can't lose customers to a competing insurer that will. Which means you have a monopsony buyer that can dictate prices. Naturally they have the incentive to dictate prices that are lower. But higher prices during the exclusivity period is how the patent system directs money to R&D. By dictating lower prices they're not paying their share of the cost of developing the drugs that only exist because the US is paying more, and causing some life-saving drugs to not exist because the US market on its own isn't enough to justify the R&D.

[danaris]

> Having a profit motive is only a serious problem when there is insufficient competition. Otherwise companies that try to make outlandish profits would lose business to companies that offer better coverage for lower premiums by taking smaller profits.

This works in an idealized free market.

Health care is, for a variety of reasons, fundamentally incompatible with this, even if the powerful and wealthy interests within it are not actively working to destroy some of the basic premises of a free market (like equal information).

[AnthonyMouse]

> This works in an idealized free market.

It works in any kind of market that isn't a dumpster fire. The closer to idealized it is the better it works, but it still works in real markets that actually exist. The people who sell towels to Walmart are not an "idealized free market" but it's close enough for practical purposes.

> Health care is, for a variety of reasons, fundamentally incompatible with this, even if the powerful and wealthy interests within it are not actively working to destroy some of the basic premises of a free market (like equal information).

Health care is not incompatible with it. People place a high value on life-saving treatment, but that's as it should be. It has a high value. If it costs a lot to provide or develop, it's worth the cost. The key is to not pay that cost in cases when it isn't necessary -- but you still want to in cases when it is.

The state of US health care and insurance regulations, however, are a dumpster fire. It doesn't have to be like this. The status quo is not optimal.

As you say, even just having real price transparency would mark a significant improvement.

Fixing that is hard because there are powerful interests behind the status quo, but the same interests are aligned against a single payer system. You can't use it as an argument against one and not the other.

[danaris]

> The people who sell towels to Walmart are not an "idealized free market" but it's close enough for practical purposes.

Towels are a commodity: they're functional, fairly easy to produce, and differentiation is a pretty straightforward tradeoff of higher price for more luxury towels.

Health care is not a commodity. Different services are not interchangeable, and for anything more specialized than basic care, there may only be one provider within a reasonable distance of you that can offer it at all, let alone at an acceptable level of quality.

Furthermore, at the point of sale, much of the time, the "customer" is neither in a condition nor a position to be shopping around. Sometimes, they're literally unconscious. And while some elective procedures and preventative visits can be scheduled and planned, emergency care is by definition not something you can plan ahead for to determine where you can get the best value for your money.

None of these things are because of the specific sorry state of healthcare in the US. They are all fundamental to its very nature. It is impossible to have a truly free market for healthcare, because getting it is literally a matter of life and death for the patient in many cases, which means that by the economics of an unregulated market, the provider can charge them literally whatever they can afford to pay. Or more.

> Fixing that is hard because there are powerful interests behind the status quo, but the same interests are aligned against a single payer system. You can't use it as an argument against one and not the other.

Great, I completely agree.

So instead of trying to fight for a tiny baby step that will improve the system by 1%, let's fight the same people for single payer, a meaningful change that will improve the system by 1000x.

[AnthonyMouse]

> Health care is not a commodity. Different services are not interchangeable, and for anything more specialized than basic care, there may only be one provider within a reasonable distance of you that can offer it at all, let alone at an acceptable level of quality.

In what way is it not a commodity? Does the medical practice in the next town over not have an X-ray machine or an operating room or whatever it is that you need? There are very few procedures that can only be done by one provider in the world.

Reasonable distance is also related to price. If the local provider is asking $10,000 then a $300 plane ticket to use a provider that charges a quarter of the price is completely reasonable. Which, if we had meaningful price transparency, would then prevent the local provider from charging $10,000 to begin with or else nearly everybody would know to buy the plane ticket and they would have no patients.

> Furthermore, at the point of sale, much of the time, the "customer" is neither in a condition nor a position to be shopping around. Sometimes, they're literally unconscious. And while some elective procedures and preventative visits can be scheduled and planned, emergency care is by definition not something you can plan ahead for to determine where you can get the best value for your money.

So have your city provide emergency rooms the same way they provide fire departments. What does that have to do with the majority of medical care which is not done on an emergency basis?

> It is impossible to have a truly free market for healthcare, because getting it is literally a matter of life and death for the patient in many cases, which means that by the economics of an unregulated market, the provider can charge them literally whatever they can afford to pay.

Being a matter of life and death doesn't break markets in any way. Markets operate through competition. It may be worth a million dollars to you to save your life, but if it only costs $200 then providers will be lining up to charge $250 and make $50.

Food is a matter of life and death too. Does that mean we should have socialized farming?

> So instead of trying to fight for a tiny baby step that will improve the system by 1%, let's fight the same people for single payer, a meaningful change that will improve the system by 1000x.

Because you can get a lot more than 1% improvement from things like price transparency or addressing existing constraints on the number of new doctors, which are easier to pass because for each one you only have to fight 10% of the incumbent apparatus instead of the whole thing aligned together.

Also because single payer doesn't actually solve problems by magic, so you still have to solve each of the individual problems anyway. If the FDA approval process continues to be very expensive and thereby causes drugs to only come to market when they're expected to be very profitable, how is single payer supposed to reduce drug prices without reducing the number of new drugs? How does it address the de facto limits on the number of new doctors? They're still independent problems.

[danaris]

Your answers talking about taking plane trips to get to other providers show that you are only considering the effects of these things on the fairly-well-off and up, and completely ignoring how they affect the poorest 50% of the population. This is not terribly surprising, on HN, but it is disappointing in a discussion of how health care and the population at large interact.

There are so, so many broken assumptions that go into your response here, from assuming that it's trivial to find out that a $300 plane trip would get you to a cheaper provider, to the idea that "the next town over" is a reasonable place to go when that's an hour's drive away and you've just been in a car crash. It's just not worth trying to address every way in which you clearly don't understand what it's like not to make 6 figures and live in a major metropolitan area.

[littlestymaar]

That's a big wall of text, with some nice ideas about how efficient markets are the solution to the problem, but you fail to realize that the US has a sub-par medical system (life expectancy is lagging quite far from most European countries) while being twice as costly as the OECD mean per capita.

[AnthonyMouse]

I understand why people use this talking point. It's easy to say and the reasons why it's nonsense involve details.

You can't compare life expectancy without accounting for cultural or geographic differences. The US has a higher rate of motor vehicle fatalities (as a result of driving more), more suicides and drug overdoses etc. These bring down life expectancy because they disproportionately impact the young. The US also has a lower population density which worsens emergency response times.

But one of the biggest factors is that the US system is really terrible for people without insurance. The outcomes for US patients with health insurance are better than they are just about anywhere. Lack of insurance is an economic problem, solvable by instituting a UBI or similar so that the people who can't currently afford insurance become able to.

One of the reasons why the US system is more expensive was already described above -- paying market prices when other countries use price controls has the US subsidizing medical R&D for the rest of the world.

There are also several other reasons costs are high specifically in the US. For example, there aren't enough residency slots but residency is required by law, which limits the supply of doctors. The FDA requires extremely expensive clinical trials but doesn't pay for them, which makes it nearly impossible to bring a new medicine to market that isn't under patent. There is a major lack of price transparency which prevents patients paying out of pocket or with high deductible insurance from comparing prices for non-emergency procedures. These are regulatory failures, not market failures.

[robocat]

> The outcomes for US patients with health insurance are better than they are just about anywhere

How many people in the US lose their health insurance because of serious health issues e.g. lose their job, or run out of money for private insurance due to spiraling costs of dealing with a serious health problem? Or because they are old? Or because due to a slight health issue, confounding effects make it much less likely to have insurance? Or poor people have worse health and they can’t afford insurance?

Saying outcomes are better for those with insurance could very easily be due to other correlated causes, and not due to the healthcare system working well.

[AnthonyMouse]

So cultural differences like substance abuse and suicide between the US and Europe explain nothing there, but cultural differences between people with and without health insurance in the US explain everything?

You're basically making the opposite point. Maybe people also live longer in Europe because they have more of a safety net (and therefore less severe poverty) in general, and so what the US really needs is a UBI rather than single payer.

[littlestymaar]

That's amazing how you seem to live in an happy imaginary world where everything is fine. There's not much to discuss when you're just making pretty stories to convince yourself. Good day.

[bhupy]

Do you actually have a counterpoint? OP's argument is well-reasoned, is shared by others [1][2], and is also empirically supported by actual market events[3][4][5].

[1] https://www.marketwatch.com/story/the-us-can-slash-health-ca...

[2] https://www.econtalk.org/keith-smith-on-free-market-health-c...

[3] https://www.bloomberg.com/news/articles/2020-02-25/walmart-t...

[4] https://www.kansascity.com/news/business/health-care/article...

[5] https://kfor.com/news/okc-hospital-posting-surgery-prices-on...

[littlestymaar]

[flagged]

[bhupy]

> The outcomes for US patients with health insurance are better than they are just about anywhere.

This is interesting, can you provide a source for this?

Agreed on all other counts.

[AnthonyMouse]

There is evidence for this from basically anyone who collects relevant data, e.g.:

https://annals.org/aim/fullarticle/2635326/relationship-heal...

> Such patients live, on average, 10 years longer in Canada than in the United States. Among U.S. patients, those without known coverage have the shortest survival; among privately insured persons, life expectancy is similar to that of patients in Canada

[littlestymaar]

You realize that your quote contradicts your own claim don't you.