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Time Mag: Free market doesn't work for health care


seabhcan

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In its first piece of real journalism in a generation, Time Magazine has a massive exposé into just why US medical costs are so high. As the author says, the US health care debate is all about 'who should pay' and never looks at why US hospitals charge multiple times the price of other developed countries. He finds that officially 'non-profit' hospitals are actually massively profitable.

Time: Why medical bills are killing us

The reason is simple. US hospitals massively and outrageously overcharge their 'customers'. Example charges include:

* $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare
* $13,702 for “1 RITUXIMAB INJ 660 MG.” The average price paid by all hospitals for this dose is about $4,000
* $995 for the ambulance ride
* $18 each for Accu-chek diabetes test strips. Amazon sells boxes of 50 for about $27, or 55¢ each
* $7 each for “ALCOHOL PREP PAD.” This is a little square of cotton used to apply alcohol to an injection. A box of 200 can be bought online for $1.91.

Unlike those of almost any other area we can think of, the dynamics of the medical marketplace seem to be such that the advance of technology has made medical care more expensive, not less. First, it appears to encourage more procedures and treatment by making them easier and more convenient. (This is especially true for procedures like arthroscopic surgery.) Second, there is little patient pushback against higher costs because it seems to (and often does) result in safer, better care and because the customer getting the treatment is either not going to pay for it or not going to know the price until after the fact.
This lengthy article is well worth a read. The ultimate point is that without price regulation, hospitals can charge what they want and make massive profits at the expense of the sick and the poor. Hospital overcharging is the reason why the US medical insurance system is broken and unaffordable, and why 60% of personal bankruptcies in the US are due to medical bills.

And ultimately, in exchange for spending 20% of GDP on their health care, Americans are more unhealthy and live shorter lives than than people in other rich countries where health spending is less than half that. The article also points out that Obamacare - which is all about the insurance companies - wont even try to fix the issue of price regulation.
 


CarnivalOfAction

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16,545
In its first piece of real journalism in a generation, Time Magazine has a massive exposé into just why US medical costs are so high. As the author says, the US health care debate is all about 'who should pay' and never looks at why US hospitals charge multiple times the price of other developed countries. He finds that officially 'non-profit' hospitals are actually massively profitable.

Time: Why medical bills are killing us

The reason is simple. US hospitals massively and outrageously overcharge their 'customers'. Example charges include:

* $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare
* $13,702 for “1 RITUXIMAB INJ 660 MG.” The average price paid by all hospitals for this dose is about $4,000
* $995 for the ambulance ride
* $18 each for Accu-chek diabetes test strips. Amazon sells boxes of 50 for about $27, or 55¢ each
* $7 each for “ALCOHOL PREP PAD.” This is a little square of cotton used to apply alcohol to an injection. A box of 200 can be bought online for $1.91.



This lengthy article is well worth a read. The ultimate point is that without price regulation, hospitals can charge what they want and make massive profits at the expense of the sick and the poor. Hospital overcharging is the reason why the US medical insurance system is broken and unaffordable, and why 60% of personal bankruptcies in the US are due to medical bills.

And ultimately, in exchange for spending 20% of GDP on their health care, Americans are more unhealthy and live shorter lives than than people in other rich countries where health spending is less than half that. The article also points out that Obamacare - which is all about the insurance companies - wont even try to fix the issue of price regulation.
Same goes for banks & many other public services.
 

ibis

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A basic market analysis of healthcare insurance will rapidly explain why factors intrinsic to the market itself mean that a free market in health is highly inefficient.

Naturally, that's often not an acceptable conclusion, but there we go - markets are very good for some things, not so good for others, and lousy at certain things. Healthcare is one of those things. It's a mechanism, not a divine force.
 

firefly123

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Same goes for banks & many other public services.
How exactly is US medical insurance a public service? Also Banks (although massively bailed out by the public) are not public services. God Knows there is inefficencies enough in the real public service to be going on about with having to resort to say stuff like what you just said.
 

firefly123

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A basic market analysis of healthcare insurance will rapidly explain why factors intrinsic to the market itself mean that a free market in health is highly inefficient.

Naturally, that's often not an acceptable conclusion, but there we go - markets are very good for some things, not so good for others, and lousy at certain things. Healthcare is one of those things. It's a mechanism, not a divine force.
 

seabhcan

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Same goes for banks & many other public services.
I would say health care is special in that it is far far more difficult for 'customers' in a hospital to make price decisions. You can't, quite literally, walk away from an A&E and shop around for more competitive product. The customer cant make a judgement about whether a particular treatment is needed or correctly priced.

The US does actually regulate prices for some of its citizens - those who are retired - who pay far less than working age people or children. Its strange that price regulation can't be extended to everyone.
 

R3volution_R3ady

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The article doesn't make any sense.

It goes after the free market but then says "without regulation" etc etc....

Well does the US healthcare system have regulation? Yes or no? Simple question.

And if it does, then how exactly does that constitute a Free Market?

Such bollox.
 

seabhcan

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The article doesn't make any sense.

It goes after the free market but then says "without regulation" etc etc....

Well does the US healthcare system have regulation? Yes or no? Simple question.

And if it does, then how exactly does that constitute a Free Market?

Such bollox.
If you mean - are prices regulated - the answer is no.

The article is quite clear - did you actually read it?
 

sic transit

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Isn't all of this widely known anyway?
 

ibis

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The article doesn't make any sense.

It goes after the free market but then says "without regulation" etc etc....

Well does the US healthcare system have regulation? Yes or no? Simple question.

And if it does, then how exactly does that constitute a Free Market?

Such bollox.
Ipse dixit.
 

ibis

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Isn't all of this widely known anyway?
As you can see from some of the reflex responses already being generated, it may be known, but that doesn't mean it's acceptable. Right wingers, in general, are free-market believers, with all that that implies in terms of using evidence to judge whether a free market actually works in all cases, or whether a free market cannot work efficiently in some cases.

Before I go to the stake a second time, I'll go for the hat-trick and add that left wingers are often opposed to using market mechanisms where they are efficient and fair, for equally doctrinal reasons.
 

R3volution_R3ady

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If you mean - are prices regulated - the answer is no.

The article is quite clear - did you actually read it?
Ipse dixit.
If prices are regulated, then there is no free market.

Why do people choose the US system to put down free market healthcare? It's not a free market.

Americans are not even allowed to purchase insurance across State lines. What about all the regulation in relation to medicines? Medical bills go up alright. Take the cancer patients that need expensive drugs. What about the need of doctor prescriptions? Where are the generic drugs?

Some free market they have in the old US of A.
 

seabhcan

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If prices are regulated, then there is no free market.

Why do people choose the US system to put down free market healthcare? It's not a free market.

Americans are not even allowed to purchase insurance across State lines. What about all the regulation in relation to medicines? Medical bills sore alright. Take the cancer patients that need expensive drugs. What about the need of doctor prescriptions? Where are the generic drugs?

Some free market they have in the old US of A.
If you read the article, it deals with all these issues. Hospitals charge 10 or 100 times the purchase price of basic medical treatments because prices are not regulated, except if you are old and on medicare.
 

stopdoingstuff

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Could this have anything to do with it at all?
The health care industry seems to have the will and the means to keep it that way. According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington. That dwarfs the $1.53 billion spent by the defense and aerospace industries and the $1.3 billion spent by oil and gas interests over the same period. That’s right: the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington.
 

Carlos Danger

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A chest x-ray, as used in the example in the article, costs about $250.00 if it is performed in a hospital in the US. This is understandable, due to the huge admin costs, wage bills and malpractice insurance paid by hospitals. Not to mention the fact that this fee is hugely subsidizing the person getting the same procedure for $20.00.

The same chest x-ray can be had for about $75.00 at a stand alone radiology clinic, where they restrict themselves to certain types of procedures in order to limit their malpractice exposure, and therefore pay a much reduced malpractice insurance premium.

Older people are the ones getting the subsidized pricing.
Older people are also more likely to need the service.
Therefore, it is understandable that the hospital has to recoup the money it loses from the privately insured.

I'm not saying it is fair, but it is how the system works. The author is only providing us with facts that support his skewed stance on healthcare.
 

R3volution_R3ady

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If you read the article, it deals with all these issues. Hospitals charge 10 or 100 times the purchase price of basic medical treatments because prices are not regulated, except if you are old and on medicare.
My point is that there is no free market healthcare system in America. There is no competition.

How can you expect competing companies to undercut each other if there is no competition...if there is no free market. That's the problem people are missing here.

Look at Canada. Their healthcare system is going under. Canadians are crawling on their hands and knees to the US for treatment. In Ireland, Fianna Fail threw billions extra in just a few short years at the HSE and the service has taken a nose dive.

The title of the thread is "free market doesn't work for healthcare". Well I'd like to get myself one of their crystal balls that tell the future. Because how do they know for a fact these things they claim when we have no evidence to suggest it? The US doesn't have a free market healthcare system so how can they say it doesn't work?
 

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