[daniel_solano]

This article didn't seem all that great. It just claims "the prices are higher" without any substantive recommendations on how that problem can be solved.

Nonetheless, it does make one interesting point:

This is a good deal for residents of other countries, as our high spending makes medical innovations more profitable. “We end up with the benefits of your investment,” Sackville says. “You’re subsidizing the rest of the world by doing the front-end research.”

In other words, the low prices for health care found in other countries is, in part, subsidised by the American consumer. As a result, it would stand to reason that if price controls were implemented in the U.S., it could result in less medical innovation or rising prices elsewhere in the world.

[jpdoctor]

> This article didn't seem all that great. It just claims "the prices are higher"

They buried the reason: “It’s very much something people make money out of. There isn’t too much embarrassment about that compared to Europe and elsewhere.”

Profiting off of the sick and injured has zero shame in the US. In fact, if you can drive the patient to bankruptcy, then you have maximized the take.

For some reason, there is no outrage. Previous generations would have used the word "profiteering", but the word seems unfashionable to apply in modern times to medicine or the military.

[snowwrestler]

Health care companies seek a profit because innovation takes capital investment, and the only way to build capital is to make a profit. The article admits to the value of this when it talks about how U.S. consumers subsidize innovations that have global benefits (like MRI machines).

I totally disagree with the idea that health care companies actively seek to drive patients to bankruptcy. Can you provide any proof of this other than your own opinion?

[jpdoctor]

One example: One of Elizabeth Warren's crusades before the banking crisis exposed that 46% of all bankruptcies circa 2007 were medically induced.

http://www.pnhp.org/new_bankruptcy_study/Bankruptcy-2009.pdf

It isn't exactly news that the industry maximizes profits.

The mere fact that you chose to write "Health care companies seek a profit because innovation takes capital investment, and the only way to build capital is to make a profit" is indicative of the problem. It's almost as if you can't imagine any other means of solving the problem.

I don't think you're alone either. In quantitative medical rankings, the US is 33rd in life expectancy and 34th in infant mortality (behind Cuba!) yet is #1 in per-capita spending.

http://en.wikipedia.org/wiki/List_of_countries_by_life_expec...

http://en.wikipedia.org/wiki/List_of_countries_by_infant_mor...

[danielweber]

46% of all bankruptcies circa 2007 were medically induced.

There were obvious problems with Warren's methodology. If I live in a system with excellent government healthcare, and I end up paralyzed, my family might still go through bankruptcy because they've lost their primary income.

The number is more like 1/4 than 1/2. 26% of bankruptcies have medical debts exceeding $1000. Obviously that includes someone owing $4000 to a dentist as well as someone owing $450,000 to an oncologist, so the real number is some portion of 26%.

[jpdoctor]

> The number is more like 1/4 than 1/2.

Great. So the number of people that have been profitteered into bankruptcy is only 1/2 of what I mentioned.

It doesn't change the basic fact: Profiting handsomely from the sick and dying used to be considered unethical. Now, it is "just business".

[snowwrestler]

The real question is what percentage of medical patients go bankrupt at all.

[snowwrestler]

There is no other known means of solving the problem of funding long-term innovation. This was one of the major lessons of the 20th century.

[roc]

> "In other words, the low prices for health care found in other countries is, in part, subsidised by the American consumer."

What you'd expect is that the research takes place in the US due to some level of higher profits, but it's far from clear whether that level ~= our current level.

Absent any determination of discrepancy between those two levels, while we can still say it's a part of the puzzle, we have no idea how large a part.

And given that a higher GDP country will tend to be the more profitable place to do any front-end research/initial rollout anyway, it wouldn't seem that researchers would need any additional profit premium to prefer the US to, say, France [1].

So while data may show differently, I certainly wouldn't expect that factor to explain any of the discrepancy between what we pay as a percentage of GDP and what France pays.

[1] In general: people in larger economies tend to spend more for things. So net profit tends to be higher there. So things tend to get researched/introduced there first. And no other industry seems to require anything close to the additional profit premium that the healthcare industry sees, to do that research/introduction here first. (auto, energy, tech, etc) In fact, the degree to which industries go elsewhere tends to hinge on massive government subsidies designed explicitly to offset this natural reward structure.

[danielweber]

Yes, it's extremely hard in America to choose to have a European level of health care, where not everything is done to keep people alive at all costs, damn the bills and damn quality-of-life and damn patient wishes to the contrary.

One quote from the "How Doctors Die" I linked to elsewhere on this page (heavily trimmed for space):

He explained to me that he never, under any circumstances, wanted to be placed on life support machines again. .... Doctors did everything possible to resuscitate him and put him on life support in the ICU. This was Jack’s worst nightmare. ... Then I turned off the life support machines and sat with him. He died two hours later. ... Even with all his wishes documented, Jack hadn’t died as he’d hoped. The system had intervened. One of the nurses, I later found out, even reported my unplugging of Jack to the authorities as a possible homicide. the prospect of a police investigation is terrifying for any physician. I could far more easily have left Jack on life support against his stated wishes, prolonging his life, and his suffering, a few more weeks. I would even have made a little more money, and Medicare would have ended up with an additional $500,000 bill.

I think it's very important that people be allowed to spend their own money on what they want, because that's where the innovation will come from that will eventually be commoditized for everyone else. But sometimes last year's pill is good enough.

[bickfordb]

Also, this article doesn't explain the price of MRIs at all. Is the price higher due to higher worker costs, more expensive machines being used, more expensive facilities or more pricing power on behalf of the providers?

[gmac]

I thought the implication from the comparison with other countries is that it's primarily pricing power: i.e. profit for the providers. But I agree that the article doesn't address the title very directly.

[scott_s]

This Planet Money podcast gets into it somewhat: http://www.npr.org/blogs/money/2013/02/26/172996963/episode-...

Part of the problem is that few people even know what the prices are.

[homosaur]

Not to mention prices are and always have been variable depending on whether you're an individual or insurance company.

[yasth]

Also weirdly enough according to the article's chart MRIs have a relatively reasonable spread.

[Maven911]

I have another post for reasons why health care is so expensive in the US (a recent infographic time magazine): https://news.ycombinator.com/item?id=5382451