[hedora]

We pay a lot for healthcare, but that money is not spent on healthcare.

It is an important distinction. For example, about 33% of healthcare dollars go to paying “claims proceesing” people at your insurance company and your doctors office to haggle with each other and produce duplicate paperwork.

If the low end of your estimate (5x) is the correct multiplier, the money that goes to claims processing would be enough to pay for universal healthcare in pretty much any other first world country.

Other things, like absurdly high drug prices, also are not healthcare spending. 90+% of drug discovery research money is spent at universities, and not by pharmaceutical companies. Also, those companies pay more for prescription drug advertising than for drug research.

[evandijk70]

"90+% of drug discovery research money is spent at universities"

Afaik this is simply not true, and even if it was, this would be misleading if you consider that most costs are made during clinical trials, which test the effectiveness of the drug.

[lotsofpulp]

> It is an important distinction. For example, about 33% of healthcare dollars go to paying “claims proceesing” people at your insurance company and your doctors office to haggle with each other and produce duplicate paperwork.

This is not true, but there is a big non patient healthcare services culprit in US healthcare costs, and that is legal liability. In the US, every entity in the healthcare chain is doing so much extra to prevent themselves from being liable, and charging extra in case they are found liable, that it inflates all costs dramatically.

Without tort reform, I doubt we see much improvement.

[throwaway173738]

Tort reform is a red herring here in that most insurance companies do things that they deserve to be sued over as a matter of routine, and they like to talk about ways to statutorily limit your right to sue them like having a system of complaints with a commissioner who has no time to process complaints. I think healthcare costs are a result of lots of different insane things that snowball rather than something simple like too many lawsuits.

[moneywoes]

What’s the easiest, ocams razor solution here? Tort sounds easy

[TexanFeller]

Here in TX they put caps on awards for medical malpractice. As far as I can tell it hasn't helped costs all that much. Also if my Dr. leaves me paralyzed I can only get 500k damages. Malpractice law is a problem, but I don't think it's the one to focus on.

[lotsofpulp]

Good point to be able to compare different states.

[nradov]

Your numbers are way off. The Affordable Care Act capped the insurance company's share at 20% (minimum 80% medical loss ratio). In practice most commercial payers are taking less than that. Certainly nowhere near 33%.

I'm not sure what point you're trying to make about drug discovery research. The major expense in bringing a new drug to market is not in the basic research but in the phase-3 clinical trials. Those often cost pharmaceutical companies upwards of $1B now.

[flagrant_taco]

How much do pharmaceutical companies make off of that $1b investment though? The scale of the investment only matters if they don't have the capital to cover.

[nradov]

Pharmaceutical company profit margins are generally in the 15% - 20% range.

https://www.gao.gov/products/gao-18-40

By comparison, several major tech companies have significantly higher profit margins.

[flagrant_taco]

That's more an argument against major tech companies than for pharmaceutical companies.

[moneywoes]

Citation for the 33%?