Hacker News Reader

Comment by edanm | Hacker News Reader

> There's some serious mental gymnastics going on here to justify that the US spends 2x the next country per capita on health care expenditure and still doesn't manage to pay for all its citizens.

I'm not exactly sure what you mean by this.

The US does spend a lot more, and doesn't cover everyone. If I understood the parent post, (part of what) it's saying that the US needs to focus on lowering costs, because otherwise, the fact that there is so much spending even now, is going to cause trouble. And more trouble than comparable countries, because the price in the US is so much higher.

I'm not sure if you're disagreeing with this, or what? Do you assume that if the US covered everyone, it would be cheaper? Would be great if you could clarify :)

View on HN

> The US does spend a lot more, and doesn't cover everyone.

The US does spend a lot more, _because_ it doesn't cover everybody.

The use-value of private health care in the the US is:

- delta (getting treated, slow painful death and/or bankruptcy)

whereas most places it is more like:

- delta (private room in fancy building, non-private room in an oldish building)

If you were a salesman, and you sold the first product for less than 5x the price of the second, you would deserve to be sacked on the spot. How could a profit-seeking economic system be so inefficient that it would fail to extract a large portion of that value from the customer?

> he US needs to focus on lowering costs

Why would a profit-seeking system seek to lower costs when high costs led to higher prices that still get paid? Any CEO suggesting such a thing would be sacked by the board the same day.

Do the math; costs are about 3x what they should be, but 85% of the market still pays them. 3 * 0.85 > 1 * 1.0.

Sure, my bad, in re-reading I can see how this wasn't clear.

I meant along the lines of: I can't see how allowing medicare to negotiate drug prices, letting nurses do more of what doctors do and publishing prices gets the US medical system anywhere close to a 50% reduction in per capita spend, or gets the US any closer to covering 100% of the population. The US should do each of these. Each would make a difference.

What the country needs, though, is real reform.

And also, yes, socialized medicine is dramatically more efficient. Medicare's overhead is only 2% whereas that of private insurance is 18%. Just knocking that off the top would bring the US per capita expenditure much more in line with the OECD.

[1] http://cepr.net/blogs/cepr-blog/overhead-costs-for-private-h...

It wouldn't. Those are 3 examples, just to prove my point about how we seem to focus exclusively on how paying for the cost of care but seemingly don't bat an eye on bringing down the costs, where there seems to be a lot of room for improvement.

If the costs were not so high, paying for it for everyone would not be as difficult to implement.

Centralized systems are more efficient when they're smaller. The bigger a centralized system becomes, the more you need to spend on intermediary layers of bureaucracy that don't actually help achieve whatever goal it is you're going for (in this case, medical care).

The US has ~330 million people. The US has ~13 million undocumented immigrants. The US is the size of Europe. You're not going to magically get the efficiency of European countries 1/10 the size by having single-payer/universal health care.

Imagine trying to have a single health care system for all of Europe. It would not be nearly as efficient as you think it would be.

Does that mean we can't significantly bring down the cost of care in the US? No, we absolutely can. But a national system in the US is never going to be as efficient as any European country's national system. It's impossible to maintain the same level of efficiency when the scale increases exponentially.

If only the United States had some kind of system of geographic administrative divisions similar to the countries that make up Europe...

Right, and states are free to enact single-payer/universal health care for their residents if they so wish. In fact, you might want to look at the Massachusetts health care system.

But implementation at a state level is obviously not what this thread is about.

For a US-wide health care system you need US-wide infrastructure/bureaucracy. This decreases efficiency.

I'm down with this -- this is how Canada's system is run. Each province provides insurance for its residents meeting the requirement to provide a socalized system as defined in the Canada Health Act. States should provide the socialized system, the federal government should mandate a public option exists (either single payer or two-tier) and the basic rules that govern one.

That completely goes against the idea of economies of scale. If smaller organizations were inherently more efficient, mom-and-pop stores would be beating Walmart and people running online stores out of their garage would be beating Amazon.

"Economies of scale" isn't a universal idea that you can apply to literally any industry/sector.

Unfortunately, medicine is not retail. Otherwise are lives would be a lot simpler. Would it be more efficient to introduce Amazon-like policies to medicine. For sure. But unlike Amazon fulfillment centres, you can't just close all the hospitals in a city and build a mega hospital 1 hour outside the city and expect anyone to go along with that.

Pretty much everything that can be "economically scaled" in the medical industry already has been -- the drugs you are receiving to treat X condition in NY and WA are probably going to be from the same company. The MR machines you use in TX are the same brand as the ones used in PA. This means those things are cheaper than they would be if they were being produced by "mom and pop" shops. Economies of scale are already in play. It's all about fixed vs. variable costs.

My point was about admin. When the scale of an organization goes up, the admin costs go up, not proportionally to the value that this admin provides. It's necessary if you want to get bigger, but not proportionally useful. With a national health system, the number of doctors you need will not go down. The number of imaging devices you need will not go down. But the amount of centralized bureaucracy you need WILL go up.

> Do you assume that if the US covered everyone, it would be cheaper? Would be great if you could clarify :)

Yes, that's exactly true. A lot of countries cover everyone, at a far lower cost per capita. Universal healthcare lowers costs. The evidence simply isn't on the side of the libertarian argument. Universal healthcare has been tried, in many, many countries, and it works just fine.

There isn't a single country you can point to, including and especially the United States, that has "free market" healthcare and gets better outcomes at lower cost than universal healthcare countries.

Universal healthcare doesn't necessarily lower costs - countries that have universal healthcare also tend to pay less for healthcare. Correlation does not equal causation, especially since the arrow arguably goes in the other direction here - in other words, the US would have universal health care if our costs were in line with other first world countries. If that second possibility is the case, implementing universal healthcare in the US might be ruinously expensive...

As for better outcomes, I think that depends on how you define "better" - if I'm remembering correctly the US is still at the top for "healthcare outcomes of the rich and powerful". That's a different criteria, and probably the one most important to the people with the ability to cause change - namely, the rich and powerful!

Reply on news.ycombinator.com