A lot of the reason hospitals have to charge so much is that they take massive losses on uninsured people in emergency rooms. Medicare for all means they don't have to treat anyone for free.
We all contribute to the pool at a time when we don't need it so we can use the money when we do, not to make CEOs or stockholders rich. That is how an insurance pool should work. Any excess money at the end of the year should be moved to the pool for the next year, not as a bonus on CEOs' 100m+ salary.
> Any excess money at the end of the year should be moved to the pool for the next year, not as a bonus on CEOs' 100m+ salary
Under the ACA, excess money in the pool must be rebated to policy holders. In practice, this worked for a few years, but eventually insurance companies ended up increasing cost in order to increase the absolute amount they were allowed to keep. Maybe this is still good (more claims approved), but it is counter productive to the goal of reducing healthcare costs.
I had a recent doctor's visit, with very good healthcare coverage, that was an in-network facility but an out-of-network provider. Coverage would have kicked in if I had a referral from my PCP, but my PCP recently retired and I was advocating for my own health for a small dermatological issue. They said it was cosmetic, my old PCP said it was not. I got a stack of 10 bills over many months all stating different things -- everything from $0 EOB to over $2k in uncovered expenses. No one would take ownership of sorting out what I was on the hook for. No one I talked to was empowered to actually solve it. It wasn't an affordability problem over $2k (but would be for my elderly grandparents on fixed income). Even asking "If I give you $2k does that resolve the debt?" was answered with "we won't know until we apply the payment" type non-answers.
Burn the whole stack down -or- earn enough you can operate on cash for the tier of care you want. Nothing inbetween seems to be working.
Aren't their profits regulated regardless? If all insurance companies became non profit and let's say total prices dropped by 3-5% that still wouldn't change the situation dramatically?
There are many factors, e.g. amongst other things American doctors are better paid than just about anywhere else in the world.
Yes and no. It's sort of a weird thing where insurance is somewhat regulated nationally but also regulated in a piecemeal fashion state by state.
There's a non-government standards body called the NAIC which provided national guidance for insurers. Most (all?) states basically say that "if you follow NAIC standards, you are good".
> If all insurance companies became non profit and let's say total prices dropped by 3-5% that still wouldn't change the situation dramatically?
It's a huge mess. It's not even really a profit vs non-profit thing but rather "what's the motivation". One major issue is that the ACA put in a loss ratio of 80%. Which isn't a terrible thing in principle, it forces insurance companies to spend money on treatment. The problem is it also means that the profit of insurance companies is tied directly to how much they spend on healthcare. As a result, they are incentivized to spend more, not less, on medical treatments so they can justify higher premiums.
This is a big part of why I think universal public insurance is a must. Basically the only organization that's motivated to keep costs as low as possible is the government.
> American doctors are better paid than just about anywhere else in the world.
This is a problem, but the bigger issue and why doctors are paid so well is because becoming a doctor is one of the more costly and hard to do things in america. There are limited spots, schools, and residency requirements that severely restricts the number of possible doctors we add per year. That drives up the their salaries.
I have a nephew going to medical school in Idaho of all places, and he's looking at $500k in debt by the end of the whole ordeal.
Investors care about margins, not absolute dollar figures. If your non-medical costs are capped, the incentive would be to reduce your other costs to preserve or maximize profits.
So the 80/20 rule is unlikely to have caused anything. More likely it's too low, and the profit ratio that can extracted and passed to investors is still higher than most investing alternatives, which is why it keeps attracting more investment. Without the 80/20 rule we would have seen the same thing or worse, though perhaps slower premium increases but less treatment delivered.
Really this all points to structural problems in the market. Naively we might presume there's not enough competition, and there could be many reasons for that--over regulation, lack of transparency. But it's more complicated than just that because medical treatment, particularly the most costly treatments, presumably have very high price elasticity [citation needed]. Over the long term, investors are just gonna keep trying to draw as much from the well as they can. The problem with public single-payer is that the basic demand curve dynamic doesn't magically change, so rather than complain about high prices people complain about shortages, OR the government just keeps borrowing to maintain satisfactory treatment access until they can't borrow anymore.
Maybe the only solution to rising healthcare costs is to slow down the pace of medical advancements. People love to point out how cheap care is elsewhere, but the most advanced and costly treatments usually become available in the US first, taking years or even decades to spread. (Note, higher prices on pre-existing tech subsidize the cost of bleeding edge treatments, so comparing MRI prices isn't very helpful.) Moreover, people elsewhere don't really know about them so it doesn't detract from their perception of the quality of care they receive. If you're dying and the doctor says there's nothing he can offer you, then that's that and no ill feelings toward the medical establishment. If he says there is something but it's gonna be crazy expensive or there's a shortage/waiting list, now your pissed.
Unfortunately, this isn't true for the government either.
Source: personal experience of me and literally dozens of people that I know. I've briefly worked with my country's government, and in that time I personally experienced and got dozens of stories along the lines of "the government spent tens of thousands of dollars of aggregate government employees' time because a single employee booked a hotel that was less than one dollar above the approved rate while traveling".
There's a good reason for this, of course: bureaucracies' policies are mostly "scar tissue" from high-profile cases where a bad actor did something they shouldn't have but wasn't specifically against policy, and then a policy was written for that case and stands for the rest of time. And, bureaucracies are risk-averse, especially democratic governments, whose leaders are elected based on optics almost as much as policy.
But it doesn't change the facts. Not only are large bureaucracies inefficient, but government bureaucracies specifically are incentivized to optimize for optics and structure rather than improving that inefficiency, and anyone who has actually worked for a large government can tell you that.
Not really accurate if you look at the closure of rural and smaller city healthcare facilities. They don't have the base to charge "regular price" to make up for the aging, less healthy, rural populations.
We all pay for it, but some pay heavier costs than others.
Americans are constantly trying to exclude uninsured people from their statistics (and, worse, from the care itself) but the comparable countries don't do this so it is utterly ridiculous to propose that the correct statistical comparison is one in which the US excludes the undesirables while other countries don't.
https://en.wikipedia.org/wiki/List_of_countries_by_total_hea...
Total health spending per capita in PPP$
2024 2023 2022
United States 14,885 13,818 12,898
Switzerland 9,963 9,301 9,089
Norway 9,393 8,909 8,533
Germany 9,365 8,503 8,652
Netherlands 8,436 7,615 7,517
Austria 8,401 7,697 7,700
Luxembourg 8,087 7,173 6,854
Sweden 7,871 7,364 6,977
Ireland 7,813 7,027 6,748
Belgium 7,750 7,178 6,906
Australia 7,469 7,015 6,907https://www.oecd.org/en/publications/health-at-a-glance-2025...
https://data.worldbank.org/indicator/SH.XPD.GHED.PP.CD?locat...
According to the world bank it's closer to 40:60 (government spending still being the majority). So that puts it behind Switzerland but still more than combined spending in just about any other country.
Even if it's US Government only per capita with people the government insures, it makes sense it would be so high because only people on government insurance are the poor/disabled AND old. Two groups that have extremely high utilization.
That means that even though government insurance in the US only covers a relatively small percent of the population, we pay more than other countries that cover the whole population.
I say convert SSA to UBI, set a floor, and let the price of things find a new level with more people in the marketplace:
Your point is correct, but since the majority of healthcare spending occurs in the last 18 months of life, and the vast majority are on either Medicare or Medicaid during that time of their life (either due to age or ailment-related incapacity), it doesn't make a huge difference.
I could make observations about who tends to be there at either but that might rustle some jimmies.
Most patients never file a lawsuit, even if things don't go well, and most injuries that aren't deaths or newsworthy are not worth the trouble to an "overburdened" court system itself imposing a lot of burdens.
And the quality life years lost waiting to share a verdict with attorneys ought to count for everyone affected, not just those who spearhead a trial by catastrophe.
I think the solution is to make the practice of medicine more scientific, and less dominated by competitive incentives, but as long as research and development, reform, or even consumer choice, is strictly a cost, that will be considered "too expensive", if not "too risky".
When patients are harmed by medical errors caused by non-quacks, that's just tough luck. Not everyone can be saved. Creating a gigantic medical malpractice insurance industry so that a few hundred surviving families per year can have lottery jackpot settlements isn't a solution in any way, and has done very little to incentivize fewer errors.
I'm used to this though.