The Waste of America's Health Care System in 1 Chart

[FarAway Sooner]

A great article on the urgent need for some kind of US health care reform at http://www.theatlantic.com/business/archive/2013/11/the-singular-waste-of-americas-healthcare-system-in-1-remarkable-chart/281782/.  It's not pro-ACA, it's just a plain revelation that the status quo isn't working and hasn't been working for more than a decade.

One quote from the article:

The problem is everybody wants the system to change, but nobody wants their corner of it to change. Doctors don't want their pay to change. And patients don't want their coverage to change. Obamacare tries to change both at the margins, and even that is politically fraught.

But something has to change.

Or, if you just want to squint to read the chart:

[LongBlade]

There is also the tort reform aspect.

There is a legitimate discussion to be made around whether we should limit the amount of damages people can sue for malpractice.

I'm not saying I know the answer, but the question is worthy of discussion. It's also worth noting that litigation attorneys make strong contributions to the Democratic party, so as a matter of course you can expect the discussion to be partisan from the start, regardless of merit.

[Mr. Bigglesworth]

A great article on the urgent need for some kind of US health care reform at http://www.theatlantic.com/business/archive/2013/11/the-singular-waste-of-americas-healthcare-system-in-1-remarkable-chart/281782/.  It's not pro-ACA, it's just a plain revelation that the status quo isn't working and hasn't been working for more than a decade.

One quote from the article:

The problem is everybody wants the system to change, but nobody wants their corner of it to change. Doctors don't want their pay to change. And patients don't want their coverage to change. Obamacare tries to change both at the margins, and even that is politically fraught.

But something has to change.

Or, if you just want to squint to read the chart:

There is a simple reason for that chart. In the US healthcare is about making money first. In other western countries it is an important part of the economy, sure, but that is not primary. The buck is not almighty.

[Dolan50]

[LongBlade]

There is a simple reason for that chart. In the US healthcare is about making money first. In other western countries it is an important part of the economy, sure, but that is not primary. The buck is not almighty.

I don't buy that explanation. There are a number of factors which drive our costs differently. Profit is certainly one of them but it's not the only explanation.

[Mr. Bigglesworth]

You don't have to buy it, it's free.  :P

[LongBlade]

You don't have to buy it, it's free.  :P

Hey, ma, look: no lines!

[FarAway Sooner]

There is a simple reason for that chart. In the US healthcare is about making money first. In other western countries it is an important part of the economy, sure, but that is not primary. The buck is not almighty.

Yes and no!  Lots of spaces in a free-market society are about making money first and foremost, but market incentives and strong competition drive costs down and value out to consumers.

The real take-away here is that the system we have is about making money first, but it doesn't have the sorts of built-in checks and balances that lead to a well-functioning free market economy. 

It's kind of funny, but one example of the health care industry where costs have plummeted in the last 15 years even as patient outcomes have soared is LASIK treatments.  That also happens to be one of the few areas of health care that generally are not covered by our current system.

As may well be implicit in your point above, the current system contains perverse incentives for everybody:

• Doctors want to maximize treatment costs and optimize patient outcomes.
• Patients want to optimize patient outcomes and don't care about treatment costs but only get to pick from one or two or maybe three insurance policies.
• Insurance companies want to minimize treatment costs and patient reimbursements but maximize premiums.
• Employers want to minimize insurance costs but optimize patient outcomes.

Combine that with a system where lack of information about the value of various medical treatments is virtually impossible for consumers to come by, price comparisons are impossible, insurance payout rules are so opaque as to be inscrutable, and employees can't shop for new insurance plans without changing jobs first, and you begin to see why a purely market-based approach doesn't seem up to reforming our current employer-sponsored health care system.

[Mr. Bigglesworth]

Good points FAS.


There is a gulf between the talk of free market economics and what actually happens out there. That is old news.
http://fora.tv/2008/10/20/Naomi_Klein_and_Joseph_Stiglitz_on_Economic_Power


What is happening in healthcare is just a small part of what is happening overall.

[Windigo]

Interesting topic, as always, but part of the equation is not covered. Healthcare can't help you live longer if your lifestyle choices suck and/or your environment is toxic... even with big bucks being spent.

[LongBlade]

Interesting topic, as always, but part of the equation is not covered. Healthcare can't help you live longer if your lifestyle choices suck and/or your environment is toxic... even with big bucks being spent.

We're also leaving out litigation.

[OJsDad]

Interesting topic, as always, but part of the equation is not covered. Healthcare can't help you live longer if your lifestyle choices suck and/or your environment is toxic... even with big bucks being spent.

We're also leaving out litigation.

And personal responsibility and not assume someone else will pay the bill

[LongBlade]

Interesting topic, as always, but part of the equation is not covered. Healthcare can't help you live longer if your lifestyle choices suck and/or your environment is toxic... even with big bucks being spent.

We're also leaving out litigation.

And personal responsibility and not assume someone else will pay the bill

The personal responsibility angle isn't exactly a free ride. Modern science can do wonders to correct a bad lifestyle but I imagine the trade-off of having to undergo surgery, radiation, and chemo for cancer offsets the some of the joy of knowing you're going to live longer. It's not like you pop a pill and the headache is gone.

[OJsDad]

Interesting topic, as always, but part of the equation is not covered. Healthcare can't help you live longer if your lifestyle choices suck and/or your environment is toxic... even with big bucks being spent.

We're also leaving out litigation.

And personal responsibility and not assume someone else will pay the bill

The personal responsibility angle isn't exactly a free ride. Modern science can do wonders to correct a bad lifestyle but I imagine the trade-off of having to undergo surgery, radiation, and chemo for cancer offsets the some of the joy of knowing you're going to live longer. It's not like you pop a pill and the headache is gone.

M. Night Shyamalan was on CNBC yesterday and was talking about education.  He pointed out on those international tests that everyone points to and says that the US education system is so bad, that if you take out the inner city school districts that the US rises to the top. 

I'm thinking the samething will apply to healthcare.  If you take out the worst of the inner cities that costs will go down and life expectancy will go up.

If you give those same people health insurance, I don't think they will use it.  I think they will ignore issues and doctors orders until it becomes an emergency. 

That's what I meant my personnel responsibility. 

[LongBlade]

M. Night Shyamalan was on CNBC yesterday and was talking about education.  He pointed out on those international tests that everyone points to and says that the US education system is so bad, that if you take out the inner city school districts that the US rises to the top. 

That is very interesting. If true it would explain a lot.