[cmiles8]

Prescriptions are a total racket. A good portion of actual medication literally costs a few dollars at most. Then there’s layer upon layer of bloat and bureaucracy that add no value but drive the cost up 10x or more. It’s totally bonkers.

When these Rx cards and Marc Cuban CostPlus drugs came out where you just pay cash and a fraction of the price I thought there must be some catch or scam here. But turns out no, they’re just cutting out all the middleware bloat and selling you the meds at a defensible markup plus their logistics costs. Love what these guys are doing.

The fact that something like that even exists highlights how corrupt and broken the health insurance companies have become. It’s their job to get better prices at scale and yet somehow they manage to sell at prices far worse that Joe Blogs off the street can get with cash.

In many ways the quality of care in the US is far better than what folks get elsewhere, which in part is probably why there isn’t a total patient rebellion, but the US’s challenges are all rooted in massive administrative overhead. If we got rid of that and had a lean system where healthcare providers can do their job without interference there would be plenty of money to go around for amazing care at lower cost.

[anon7000]

> It’s their job to get better prices at scale and yet somehow they manage to sell at prices far worse

Maybe on paper, in reality their job is to return as much profit as possible to shareholders. Convoluted bureaucracy, complicated regulations, layers of useless middlemen… they all help to reduce competition and increase profits. There are industries where the “free” market doesn’t work, partly because “human well-being” is a non-goal for any health insurance company. The entire point of the insurance business model is to avoid paying for it as much as possible

[nsvd2]

In no way shape or form is the medical industry in the US a free market, it's one of the most heavily regulated sectors in the economy. Remember when the government wanted to make purchasing health insurance mandatory? Forcing employers to pay for their employees health insurance greatly distorts the market. And many other things...

By the way, as much as people complain about the profit seeking motives of insurers, many of them have been performing abmysally in the last six months. As it turns out, our current system is bad for just about everyone.

[ciupicri]

In Romania the employer takes a cut from the employee's salary and gives it to a government agency for the health insurance (some thing with income tax, social security (pension), etc). I think this is happening in other European countries as well.

Some employers also offer as a bonus a sort of subscription at a private clinic, so you can see a private doctor or have an operation for a lower price or even for free.

[simonh]

Same in the UK.

In the USA the government health programs for people in low incomes, children and pensioners cost about as much as a typical European single payer health system. Then tax payers get to pay to be gouged by health insurance companies to get any cover for themselves.

[rectang]

> In no way shape or form is the medical industry in the US a free market, it's one of the most heavily regulated sectors in the economy.

If any regulation at all makes a market not "free", then there are no free markets as soon as we have any laws.

Like all free markets, this one is regulated. There are degrees of freedom.

[shaftoe]

In this market, neither the producer nor the consumer are responding to price signals and often neither knows what anything costs. The Payer (literal healthcare industry terminology) does but isn't producing nor consuming the service.

This is why this isn't a free market. It's not about regulation, it's about the system being divorced from responding to market dynamics.

[alistairSH]

There are degrees of freedom, but within the American framework, medical care is on the less-free end of the spectrum.

Aside all the insurance stuff, you cannot open an MRI imaging lab or similar without a letter of need from the local government. The supply side is quite literally gated by existing players in the market (via campaign bribes and similar).

[nickff]

Just to tack on, dentistry is an example of a somewhat freer market than 'healthcare', and veterinary care is an example of an even freer (though somewhat different) medical service.

[FireBeyond]

And pharmacy vertical integration is an easy way for them to get around regulated profit margins. While if your profits are capped at 15%, the only way to increase them is to increase premiums as a result of increasing providers costs (which the insurers can and absolutely are doing, of course), if you own the pharmacy supply chain, you have freer reign to increase those prices.

Healthcare is one where vertical integration can be really profitable, even at the smaller scale. I used to work as a paramedic, both local agencies and private. The private ambulance company I worked for started when a man who owned a nursing home realized how much money the facility was paying for ambulance transports, so he started an ambulance company. He realized how much his ambulance company was paying to industrial/medical gas companies for oxygen, so he started a medical gas company. And so on. And went from his one small nursing home to his daughter having a $100M empire by the time he died 30 years later.

[ethbr1]

> The entire point of the insurance business model is to avoid paying for [human well-being] as much as possible

For-profit health insurance. Which imho should be illegal.

A lot of the US' quasi free-market, in-name-only health insurance problems would be solved by:

1. Requiring all insurers to be not-for-profit (critically: also including all corporate owners of insurers too)

2. Tying financial incentives and disincentives to outcome-based KPIs

[LorenPechtel]

Big problem here: You get more KPI, not better outcomes. Things like no doctor being willing to risk working a high risk patient.

We have already seen it with things like Medicare Advantage plans doing sign-up meetings on the second floor of buildings without elevators etc.

[rexroad]

Fair point about KPI gaming, and it's a real problem in value-based care. But the fix in Issue #3 (commercial reference pricing at 200% of Medicare) is a price cap, not a quality incentive structure, so it doesn't directly create the risk-avoidance problem you're describing.

Montana Medicaid has used 200% Medicare reference pricing since 2015. Published evaluations haven't shown measurable quality deterioration or patient-selection effects in that program. The RAND Round 5.1 study underlying the savings estimate controlled for case mix, so it's comparing equivalent procedures at equivalent acuity. Risk adjustment is still genuinely hard at the individual level, and the concern is well-founded for P4P schemes. It's a separate question from whether commercial payers should pay 254% of Medicare rates for the same surgery at the same hospital.

[ethbr1]

Medicare Advantage is a clusterfuck from start to finish (denying more claims than Medicare while also costing taxpayers more), precisely because it tries to micro-manage KPIs.

If you want to look at them done correctly, look at the FEP program. High-level KPIs that are difficult to game (without actually improving service & outcomes) tied to financial incentivizes.

[alistairSH]

Does "not for profit" actually solve anything? Aren't most private universities also not-for-profit, while also being major real estate owners, developers, managing massive investment portfolios, etc?

[evandijk70]

It doesn't.

The Netherlands has a system with both not-for-profit and for-profit insurers, that works reasonably well.

- Transparent, identical rules for minimum coverage and strict rules on minimum and maximum deductible for all insurers and insurees. - Mandatory coverage for everyone (just like liability insurance is mandatory for cars in the US) - Insurers do not have the right to refuse any applicants based on pre-existing conditions - Insurers directly negotiate with hospitals on rates. Emergency care has to be covered regardless of whether hospitals are in network or not.

[rexroad]

The Dutch model is a useful counterexample to the argument that you need a single-payer structure to contain costs. Netherlands uses regulated private insurers with community rating and risk equalization, yet achieves per-capita spending well below the US (roughly $7,200 vs. $14,570 in 2023 OECD data). The direct insurer-hospital negotiation you describe is also how Germany's sickness funds operate.

The US equivalent would be all-payer rate setting. Maryland has run a statewide all-payer hospital rate system since 1977 with documented cost containment. Issue #3 of this series focuses on a lighter-weight near-term version: capping commercial hospital payments at 200% of Medicare (already used by Montana Medicaid and thousands of self-insured employers). The Dutch model shows a stronger structural fix is feasible. The question is political path, not technical feasibility.

[throw0101c]

> Does "not for profit" actually solve anything?

Ask the Swiss and/or Germans? AIUI there are (aspects of) their health insurance that are mandated to be non-profit.

Perhaps someone from one of those countries can give more details.

(IIRC, the Swiss only 'recently' moved to universal coverage: in the 1990s?)

[ethbr1]

In my experience Kaiser / the Blues have their issues (mostly inefficiency), but not nearly as many directly anti-patient incentives as United Healthcare et al.

Generally speaking, you get decent outcomes with {not for profit} + {efficiency/outcome based KPI}, because the primary thing you're fighting is apathy (not for profit) instead of malicious profiteering (for profit).

And capitalism doesn't particular lend itself to running an insurance company. Fundamentally, there's not that much that should change year-to-year at insurers than {actuaries / pricing}.

Have pharmacy benefits or all the other kooky for-profit inventions really improved patient experience and outcomes?

[adrianN]

Human well-being should reduce medical expenses, so at least in theory it should be a goal of insurance companies.

[Turskarama]

> In many ways the quality of care in the US is far better than what folks get elsewhere, which in part is probably why there isn’t a total patient rebellion

How sure of this are we really? Other countries mostly have problems with emergency departments being full, but that's less because those emergency departments are worse and more because in the US people aren't going, they just stay home and hope they don't die.

[youknownothing]

As a person who has lived in Spain, UK, and now California, I can attest to one thing: the quality of care in California (I can't speak for the whole country) is vastly superior to what I received in both Spain and UK.

Sate-sponsored universal healthcare is amazing, I love the concept, but it also means that they have to run it like a very stingy HMO. They have a rulebook and they go by it, if your case is even the slightest out of their parameters, tough luck. And don't you dare ask for a second opinion, you'll get the doctor that has been assigned to you and accept whatever they tell you. I could bore you with countless stories of doctors who have used tricks not to provide service and make it look like it was the patient's fault.

The problem with private healthcare is that profits corrupts it. The problem with public healthcare is that politics corrupts it. There is no good solution.

[nicoburns]

I think this is mostly a problem with state funded healthcare budgets being cut (relative to population demographics) in these countries. If the UK or Spain spent anywhere even close to what the US spends on healthcare (per capita), I have no doubt that it's healthcare provision would be just as good. In the UK, healthcare provision was notably dramatically better 20-30 years ago under the same system (except for less private finance).

[eitally]

I don't think so. With state funded healthcare you get rigid rulebooks and policies. In the capitalist-ish US model, if you are a successful advocate then you can get better than average care because there's enough flexibility in the system (in many cases, physicians can individually decide to over-extend for one patient if they choose to) to allow for this. Having a private payer market absolutely helps here.

[nicoburns]

Having care depend on "being a successful advocate" does not sound like a good thing to me! Albeit it's probably impossible to avoid entirely. We want good care for everyone.

I'm mostly familiar with the UK system, but medical professionals make pretty much all the decisions here, with a large degree of discretion according to their professional judgement (and they never have to adjust or delay their care based on whether you can pay). Except for some particularly expensive treatments (think CAR-T for cancer) which are not available at all in the state funded system. But you can still pay for those privately if you want to.

[fragmede]

> Having care depend on "being a successful advocate" does not sound like a good thing to me!

It's not. You have to become a horrible demanding person to get a decent level of care instead of things being nice.

[gopher_space]

> With state funded healthcare you get rigid rulebooks and policies.

We could just not do that. If you change the flow of control certain problems solve themselves. Think about a landscape where government funding multiplies the patient dollar, for example.

[LorenPechtel]

The problem is that it always happens. There's no such thing as comparable funding.

[gnz11]

I'm sure there is a lot of nuance but long term healthcare outcomes are generally lower in the US compared to other countries. https://www.healthsystemtracker.org/chart-collection/quality...

[alistairSH]

Personal anecdote... My uncle is an auto mechanic in Scotland (Scottish NHS) and my brother-in-law is an auto mechanic in WV, USA.

Both have similar health care outcomes - they have ready access to quality care, specialists, etc. ER/A&E is available. The biggest difference is the perceived cost and stress incurred by that cost. My uncle doesn't give much thought to health care - he can work, retire, whatever and be assured a reasonable level of care. My BIL will work to 65 or beyond, fighting red-tape the entire time, then retire and still have to deal with supplemental programs.

Looking at another uncle, who was a small business owner in Scotland vs my father (also small business owner), it's similar to above, just with more money at stake. Uncle also purchased additional insurance on top of NHS for faster access to selective care, still cost less than insurance in the US, even after accounting for tax differences.

American's kid themselves when they say the Western Europe has higher taxes. Once you account for medical care, college funding, and other similar things, it's pretty close.

[rexroad]

The RAND Round 5.1 study (2023) puts US commercial insurer payments at 254% of Medicare rates for identical procedures. That's the mechanism behind the international gaps — it's not complexity or quality, it's that commercial insurers negotiate against chargemaster list prices rather than against cost. The HCRIS cost-to-charge analysis (3,193 hospitals, FY2023) puts median markup at 2.6x actual costs.

[bandofthehawk]

I think this difference mostly disappears if you group Americans by wealth. So wealthy Americans have similar life expectancies to those in other countries. It's really the poor that are most affected by our dystopian healthcare system, which is probably a big part of why it never gets fixed.

[rexroad]

The obesity adjustment is worth quantifying. US adult obesity: 42% (CDC). UK: 28%, Australia: 31%, Germany: 22%. Those gaps are real, but they don't explain a 2.5x per-capita spending differential. The Commonwealth Fund's 2021 analysis controlled for age, income, and chronic condition burden; the US still spent roughly $5,000 more per capita than the next-highest spender (Switzerland).

Obesity also matters less than assumed in hospital pricing: a hip replacement costs $29,000 commercially in the US regardless of patient BMI, vs. $15,000 in Germany and $9,000 in Spain (iFHP 2024). The cost structure is in the pricing system. Johns Hopkins researchers estimated eliminating US obesity would reduce healthcare spending by about 12%, real but not 2.5x. Repo with methodology: https://github.com/rexrodeo/american-healthcare-conundrum

[dinkumthinkum]

Hvae you considered that America is a much larger and much more diverse country that these other countries and and it is very different social norms? Obesity is a major problem in America and it is not the fault of the doctors. I wonder if this has anything to do with it?

[adrianN]

Obesity is a problem in lots of countries.

[LorenPechtel]

So we do better at actually delivering care, they do better at getting it delivered to everyone.

[avhception]

Yet, living in Germany, the problems I hear about our healthcare system from friends or in the media are an absolute far cry from the insanity that I hear about the US system. Maybe some of it is sensationalism, but I very much doubt that would account for the whole story.

[9x39]

What's usually missing from anecdotes is class cohorts - so, US working class with Medicaid or a crappy marketplace plan vs working professional with an amazing plan vs retiree with Medicare vs...

Nothing's perfect, but the plan differences seem stark. For example, my wife had a crappy marketplace plan and I had a plan through my employer. For her, an MRI was denied, denied, then finally approved with many calls. For me, it was approved immediately. For her, pre-auth to a specialist was denied until her doctor went and tried a different referral strategy. For me...well, I haven't been denied yet. It goes on - same city, same hospital, some of the same referrals, etc.

I've come to think the price discrimination really does mean we have class-based care which seems to allow for the sensationalism. Combine a dire scenario with a working or indigent class American, and they don't have to exaggerate much at all.

[titzer]

Having lived in both Germany and the US, my experience with the German system is that there are a lot more, smaller hospitals and private practices, the care is good, and all I ever paid for out of pocket was prescription medications. I didn't have to wait long for an MRI (two weeks) versus months in the US. I had a number of things that would have been hundreds or thousands of dollars in the US that I never paid a penny for in Germany. I'll also say that hospitals are absolutely crazy about sending bill collectors after you. I had a handful of small charges--like $10 or $20 things--that I hadn't realized were even there and two months later they freaking inundated me with bill collector notices.

It does make a big difference exactly where you are in the US, however. Some places have a glut of healthcare providers and other places don't.

[matwood]

> I didn't have to wait long for an MRI (two weeks) versus months in the US.

Where in the US did you have to wait months? There seems to be an MRI/imaging location in every other shopping center in the US right now. I've never had a problem getting a same day MRI when needed. Perhaps you were waiting for the 'free' one your insurance would accept?

[pnutjam]

Why wouldn't you wait for one your insurance would approve? You're probably paying them thousands every month.

[titzer]

Pittsburgh / UPMC.

Now try to schedule a colonoscopy. It'll probably take two or three months.

[rexroad]

Personal experience with specific interventions reflects something real: US cancer survival rates, cardiac procedure outcomes, and access to cutting-edge treatments are genuinely strong for people with good coverage. That's not disputed.

The cost-outcome tradeoff shows up at the population level. US life expectancy: 77.5 years. Spain: 83.6. UK: 81.6. Infant mortality: US 5.4 per 1,000 vs. Spain 3.4, UK 3.7 (OECD 2023). The US spends $14,570 per capita. Spain spends $3,300, UK $4,100. If the premium were buying 10 extra years of life expectancy and half the infant mortality, it might be worth the argument. The data shows the opposite at population scale.

The newsletter's framing isn't that US clinical quality is poor. It's that the US is paying $3T more per year than Japan (same life expectancy, lowest infant mortality in OECD) for aggregate outcomes that are worse.

[youknownothing]

The cost and life expectancy differences are indisputable, but the rationale may need more nuanced: that's not necessarily a problem with the healthcare industry, but with lifestyles, safety regulations, food standards, and a long et cetera of reasons. For instance Spanish people, on average, have more balanced diets and are more active than American people. They also lead much less stressful lives. That's a big factor.

[pnutjam]

"And don't you dare ask for a second opinion, you'll get the doctor that has been assigned to you and accept whatever they tell you."

This happened to us with private healthcare. There is basically one specialty group for the procedure my family member needed so any 2nd opinion request just got routed back to the same doctor, "Oh, your Dr X's patient". Also, we could barely afford the procedure so we missed out on some follow up testing that would have verified things worked properly and basically got blacklisted from that practice so hopefully it's resolved...

[biophysboy]

There are other public healthcare models besides Beveridge though. Some countries do the payment & financing via gov, but the actual service is a mix of public/private. Not a perfect solution, but in my opinion better than what we have now. Maybe more achievable than Beveridge too.

[ninalanyon]

Norway funds health care through taxation, seems to work pretty well here. But we don't have PFI, instead there are fully private healthcare companies that act as suppliers of services such as MRI, CAT scans, etc. So if your GP orders an X-ray or MRI you will most likely get it done by a private company rather than the local hospital. The patient doesn't really see any difference most of the cost is borne by the state, the patient pays a small egenandel (like copay in the US, excess in UK insurance terms) wherever it is done.

I'm not sure how the other Nordic countries do it but I think it's probably similar.

[cherryteastain]

You can also get private medical insurance in the UK. The cost is usually much lower than the US and quality is decent. NHS acts as an anchor keeping down premiums.

[alexfoo]

I guess that's because many/most countries don't have the concept of a private emergency department.

It doesn't really matter how much money you have if you have a broken leg as you'll be queuing up with everyone else for the triage and initial treatment.

I have amazing private healthcare coverage in the UK through my employer. I've had certain treatments done in under a week where the NHS waiting lists for the same procedure are measured in years.

But if I have a serious acute illness, or break a bone, my private healthcare can't help other than give me a telephone appointment with a doctor within 10 minutes at which point they'll say "What are you doing calling us? Go to the emergency department now!"

After the initial triage/treatment/stabilisation there may be a different pathway for people with private healthcare, but the doors of the emergency department are the first port of call for pretty much everyone who is in dire need.

(I'm sure for people who are seriously rich there are private arrangements, most people with serious money have doctors/dentists/etc on retainer, but these are the 0.001%)

[dabiged]

Australia reporting in.

We have private emergency rooms. We call them urgent care and you can go and see a qualified physician with allied health services (radiology, pathology). If they can fix you up they will. If not you get transferred via ambulance to the nearest public hospital and triaged as required.

I took my kid to one last weekend as they had been diagnosed by our family Dr as having pneumonia. The emergency physician ordered chest x-ray and full suite of pathology and we had results in less time than we would have waited in the public hospital waiting room. Yes we paid.

[glenngillen]

Also Australia reporting in.

I've unfortunately had a number of emergency visits over the past few years. I'm a bit torn on the public vs private situation. For certain classes of issue (e.g., broken bones) my friends who work in hospitals have repeatedly said they'd go public purely because the volume of patients those surgeons have to treat daily means the teams in the public systems are typically incredibly experienced. And yet, I smashed my hand to pieces mountain biking on a holiday weekend and when I arrived at the ER the place was absolutely rammed and it was going to be a many hours wait to even get triaged. We got straight back in the car and drive to the private ER 5 minutes down the road and were seen immediately.

In the moment I was incredibly appreciative of that option. It does make me feel uncomfortable that it was only an option because I could afford to pay to jump the queue though.

[Aeolun]

Does it make sense to get an x-ray for that? I’m sympathetic to the desire, but isn’t the end result for pneumonia always antibiotics anyway?

[SoftTalker]

If it's not pneumonia, antibiotics might not help.

[LorenPechtel]

Simple test: The reports saying the UHC systems are better always are using statistical games. If they were really better why would they put their thumb on the scale?

Things like making 20% of the score "fairness"--as in UHC. And hiding the fact that most of the life expectancy difference is infant mortality and most of the difference in infant mortality is a reporting issue: infant mortality + stillbirth produces a far flatter plot. Thus much of the difference is whether it's considered to have died before birth or after birth.

[dsr_]

There are certainly locations in the US where the standard of patient care -- ignoring cost -- is world-class.

And there are certainly locatioms in the US where the standard of patient care is nowhere close to that, and would be easily beaten at any major hospital in any other first-class economy.

[some_random]

There are people who have lived in multiple countries, and speaking with them the only place that seems to be comparable (until you factor in private healthcare of course) is Switzerland.

[adrianN]

Patient outcomes should provide reasonably hard data for comparisons. Life expectancy at least is not vastly better in the US, how about other metrics?

[samiv]

"In many ways the quality of care in the US is far better than what folks get elsewhere"

This comment has very strong survival ship bias though because you're only looking and ranking the treatments that did happen. How about the cases when the person was denied treatment based coverage or whatever reason. These cases should rank too.

[realo]

"... quality of care in the US is far better ..."

Care starts when you need it, at the ambulance level.

Recently we saw that people who dial 911 in the US can actually die because the ambulance arrives hours (!!!) later.

So no. Quuality of care in the US is not that good.

[PaulHoule]

See https://pharmacy.osu.edu/news/prescription-discount-cards-wh...

[rexroad]

Thanks for sharing the OSU piece, good read. A few things it surfaces that complicate the "discount cards help patients" narrative: discount card companies still contract with PBMs to set pricing, they don't bypass them entirely. The savings often come out of the pharmacy's margin rather than the PBM's: the article shows a pharmacy receiving $5 on a drug it acquired for $15, with the PBM still collecting a transaction fee either way. GoodRx was also fined by the FTC for selling patient health data to advertisers without authorization, so there's a second extraction happening on the data side.

The deeper point the card market reveals: a profitable arbitrage layer can consistently undercut the insurer's "negotiated" rate, which tells you the negotiated rate isn't really a discount. Generic apixaban costs £1.16 per 30-day supply in the UK. Medicare's gross cost for Eliquis (same molecule) is $862.

[fragmede]

The catch is that Mark Cuban is now the one capturing the rewards instead of the now-unknown-to-me-in-the-wake-of -Luigi-Mangione healthcare tech company CEO

[dsr_]

https://en.wikipedia.org/wiki/Stephen_J._Hemsley

You're welcome.

[hammock]

People are waking up and a lot is happening to counteract some of this.

In the FY26 omnibus bill passed by Congress and signed last month by Trump is the most aggressive federal crackdown on PBMs in history. Starting in 2028 it bans PBMs from taking a percentage cut, which is exactly what incentivized them to drive up the sticker price of your meds. It forces PBMs to pass 100% of the rebates and discounts they negotiate directly to employer health plans, stopping them from pocketing the savings. And PBMs are now mandated to provide detailed semiannual reports exposing their "spread pricing" (charging the plan more than they pay the pharmacy) and their shady practices of steering patients only to pharmacies they own

Also to do what Mark Cuban did but on a national scale, the federal govt launched TrumpRx.gov, a direct-to-consumer federal platform that completely cuts out the PBMs and insurance deductibles you're talking about , allowing people to buy dozens of the most popular meds for an average of 50% off.

Finally one benefit from the threats of tariffs has been that companies like Pfizer caved and signed landmark deals with the US to offer their drugs at “most favored nation” prices to Medicaid and directly to consumers

[rexroad]

The rebate pass-through rule (effective 2028) is a real step, and worth tracking. But rebate retention is one of six extraction mechanisms the Big 3 PBMs use. The FTC's Interim Reports I and II (2024-2025) documented $7.3B in specialty drug markups alone, separate from rebate games. The Ohio Auditor found PBM spread pricing extracted $224.8M from a single state's $2.5B Medicaid drug budget in one year.

The rebate rule doesn't touch spread pricing, formulary manipulation, or self-preferencing to vertically integrated pharmacies. Issue #4 (scheduled for releases 3/22) of this series covers the full mechanism stack and what each proposed reform actually targets. Repo: https://github.com/rexrodeo/american-healthcare-conundrum

[pnutjam]

TrumpRx is mostly hot air. https://democrats-energycommerce.house.gov/sites/evo-subsite...

[Aeolun]

> In many ways the quality of care in the US is far better than what folks get elsewhere

Or so people keep telling themselves to not feel completely fucked?