Dr. Hand Of The Invisible Free Market

[Missouri_Mike]

I was at Rhode Island Hospital last year to visit my grandmother when she was there, and that place is like . . . unbelievable. It has a museum and a big fish tank built into the wall, leather couches and flat screen TVs everywhere. The place is NICE. Too nice. They are a hospital for goodness sake!

I guess you should have have shipped her ass down to Cuba then. They don't have such things there.

 

[ChrisL]

If the programs were RUN right, then we wouldn't have these issues. The whole system is effed and needs fixing.

*SIGH* Government programs aren't suddenly going to start running efficiently!

Well, we need to start insisting that they do. They need to have better and more competent people and employees.

Well that's the thing... Government employees aren't accountable. Government agencies aren't accountable. It's the free market capitalist system where competition for consumer market share ensures accountability to the consumer. Expecting your government to do anything more efficiently than the private sector is a Utopian pipe dream. Thinking some government stiff gives two shits about "customer satisfaction" is just foolish thinking.

Well that concept certainly isn't working out the way it should when it comes to our healthcare system!

How cancer drugs doubled to $10,000 per month

For cancer patients, life can be full of worry, pain and the stress of needing to take time off from a job. On top of that, many are struggling with a huge jump in the average price tag for branded oncology treatments, which have doubled to $10,000 per month in just a decade. During the same period, the consumer price index has increased by 23 percent.

That jump is contributing to a surge in global spending on oncology treatments, which reached a whopping $91 billion last year, according to a new report from the IMS Institute for Healthcare Informatics. The U.S. is the largest segment of that market, with American patients and their insurers paying $37.2 billion for oncology treatments in 2013.

The high cost of some new cancer drugs has raised ethical questions, as more than 100 cancer specialists last year wrote in a commentary that drug prices of $100,000 or more for treatments could be viewed as profiteering and may be causing financial harm to patients.

Some insured patients in the U.S. may be on the hook for covering 20 percent of their drug payments, no small matter when the monthly price for a prostate cancer treatment called Provenge is more than $71,000, according to the IMS study.

The study also found that patients were less likely to persist with treatment as the costs climbed. Even copays that were as low as $30 to $90 appeared to affect how long patients took their medication, with the fall-off in treatment more pronounced as copays got higher, the IMS study found.

"The evidence of patients stopping their therapy due to high out-of-pocket costs is alarming," Murray Aitken, executive director of the IMS Institute, said in an email to CBS MoneyWatch. "Fortunately there are patient assistance programs and other mechanisms available to help patients with this issue."

While that might be the case, other research has shown that cancer can deal a heavy financial blow to household finances. Cancer patients are more than two times as likely to file for bankruptcy compared with Americans without a cancer diagnosis, researchers from Fred Hutchinson Cancer Research Center in Seattle wrote in a 2013 study.

Prices are also higher in the U.S. than in Europe, where medications are as much as 38 percent lower, the IMS study found. "In the U.S., there are very minimal, if any, discounts," the report noted.

Of course, cancer medications aren't the only ones seeing huge price increases. Dozens of brand-name drugs have doubled in price since 2007, Bloomberg News reported last week. Pharmaceutical companies are introducing new drugs at sky-high rates, such as Gilead Sciences' (GILD) new hepatitis C treatment Sovaldi, which costs $1,000 per day.

 

[ChrisL]

So, if you suddenly become sick and lose your job because you can no longer perform it due to your medical problems, and you lose your health insurance, then what? Rely on charity? Well, a lot of food pantries (which rely on the "charity" of people), don't even have enough food to feed all the homeless, so imagine expecting them to come up with 10,000 or 20,000 a month for your medication. And you are just one of many, many, many people.

 

[Missouri_Mike]

If the programs were RUN right, then we wouldn't have these issues. The whole system is effed and needs fixing.

*SIGH* Government programs aren't suddenly going to start running efficiently!

Well, we need to start insisting that they do. They need to have better and more competent people and employees.

Well that's the thing... Government employees aren't accountable. Government agencies aren't accountable. It's the free market capitalist system where competition for consumer market share ensures accountability to the consumer. Expecting your government to do anything more efficiently than the private sector is a Utopian pipe dream. Thinking some government stiff gives two shits about "customer satisfaction" is just foolish thinking.

Well that concept certainly isn't working out the way it should when it comes to our healthcare system!

How cancer drugs doubled to $10,000 per month

For cancer patients, life can be full of worry, pain and the stress of needing to take time off from a job. On top of that, many are struggling with a huge jump in the average price tag for branded oncology treatments, which have doubled to $10,000 per month in just a decade. During the same period, the consumer price index has increased by 23 percent.

That jump is contributing to a surge in global spending on oncology treatments, which reached a whopping $91 billion last year, according to a new report from the IMS Institute for Healthcare Informatics. The U.S. is the largest segment of that market, with American patients and their insurers paying $37.2 billion for oncology treatments in 2013.

The high cost of some new cancer drugs has raised ethical questions, as more than 100 cancer specialists last year wrote in a commentary that drug prices of $100,000 or more for treatments could be viewed as profiteering and may be causing financial harm to patients.

Some insured patients in the U.S. may be on the hook for covering 20 percent of their drug payments, no small matter when the monthly price for a prostate cancer treatment called Provenge is more than $71,000, according to the IMS study.

The study also found that patients were less likely to persist with treatment as the costs climbed. Even copays that were as low as $30 to $90 appeared to affect how long patients took their medication, with the fall-off in treatment more pronounced as copays got higher, the IMS study found.

"The evidence of patients stopping their therapy due to high out-of-pocket costs is alarming," Murray Aitken, executive director of the IMS Institute, said in an email to CBS MoneyWatch. "Fortunately there are patient assistance programs and other mechanisms available to help patients with this issue."

While that might be the case, other research has shown that cancer can deal a heavy financial blow to household finances. Cancer patients are more than two times as likely to file for bankruptcy compared with Americans without a cancer diagnosis, researchers from Fred Hutchinson Cancer Research Center in Seattle wrote in a 2013 study.

Prices are also higher in the U.S. than in Europe, where medications are as much as 38 percent lower, the IMS study found. "In the U.S., there are very minimal, if any, discounts," the report noted.

Of course, cancer medications aren't the only ones seeing huge price increases. Dozens of brand-name drugs have doubled in price since 2007, Bloomberg News reported last week. Pharmaceutical companies are introducing new drugs at sky-high rates, such as Gilead Sciences' (GILD) new hepatitis C treatment Sovaldi, which costs $1,000 per day.

That wasn't a good article to use as a rebuttal.

 

[dblack]

Healthcare is way more expensive here in the US than anywhere else in the world, and yet our healthcare system isn't even rated #1. Why is THAT, do you think?

Now, I know some of you are going to be angry and get mad and a throw a fit, but this is why. I don't know if single payer is the answer, although some argue that it is. I know there MUST be some other ways to fix it.

6 Reasons Healthcare Is So Expensive in the U.S.

1. Administrative Costs
The number one reason our healthcare costs are so high, says Harvard economist David Cutler, is that “the administrative costs of running our healthcare system are astronomical. About one quarter of healthcare cost is associated with administration, which is far higher than in any other country.”

One example Cutler brought up in a discussion on this topic with National Public Radio was the 1,300 billing clerks at Duke University Hospital, which has only 900 beds. Those billing specialists are needed to determine how to bill to meet the varying requirements of multiple insurers. Canada and other countries that have a single-payer system don’t require this level of staffing to administer healthcare.

2. Drug Costs
Another major difference in health costs between the U.S. and every other developed nation is the cost of drugs. The public definitely believes drug costs are unreasonable; now politicians are starting to believe that too. In most countries the government negotiates drug prices with the drug makers, but when Congress created Medicare Part D, it specifically denied Medicare the right to use its power to negotiate drug prices. The Veteran's Administration and Medicaid, which can negotiate drug prices, pay the lowest drug prices. The Congressional Budget Office has found that just by giving the low-income beneficiaries of Medicare Part D the same discount Medicaid recipients get, the federal government would save $116 billion over 10 years. Think of what the savings might be if all Medicare recipients could benefit from Medicaid-negotiated drug prices!

3. Defensive Medicine
Yet another big driver of the higher U.S. health insurance bill is the practice of defensive medicine. Doctors are afraid that they will get sued, so they order multiple tests even when they are certain they know what the diagnosis is. A Gallup survey estimated that $650 billion annually could be attributed to defensive medicine. Everyone pays the bill on this with higher insurance premiums, co-pays and out-of-pocket costs, as well as taxes that go toward paying for governmental healthcare programs.

4. Expensive Mix of Treatments
U.S. medical practitioners also tend to use a more expensive mix of treatments. When compared with other developed countries, for example, the U.S. uses three times as many mammograms, two-and-a-half times the number of MRIs and 31% more Caesarean sections. This results in more being spent on technology in more locations. Another key part of the mix is that more people in the U.S. are treated by specialists, whose fees are higher than primary-care doctors, when the same types of treatments are done at the primary-care level in other countries. Specialists command higher pay, which drives the costs up in the U.S. for everyone.

5. Wages and Work Rules
Wages and staffing drive costs up in healthcare. Specialists are commanding high reimbursements and the overutilization of specialists through the current process of referral decision-making drives health costs even higher. The National Commission on Physician Payment Reform was the first step in fixing the problem; based on its 2013 report, the commission adopted 12 recommendations for changes to get control over physician pay. Now it is working with Congress to find a way to implement some of these recommendations.

6. Branding
“There is no such thing as a legitimate price for anything in healthcare,” says George Halvorson, the former chairman of health maintenance organization Kaiser Permanente. “Prices are made up depending on who the payer is.”

Providers who can demand the highest prices are the ones that create a brand everyone wants. “In some markets the prestigious medical institutions can name their price,” says Andrea Cabarello, program director at Catalyst for Payment Reform, a nonprofit that works with large employers to get some control on health costs.



Read more: 6 Reasons Healthcare Is So Expensive in the U.S. | Investopedia 6 Reasons Healthcare Is So Expensive in the U.S.
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All of this is trivial in comparison to the inverted incentive structure created by too much insurance. They are all easily kept in check by consumers making sane value decisions. That's the missing piece. No one cares what their health care costs because no one is paying for it.

 

[ChrisL]

Healthcare is way more expensive here in the US than anywhere else in the world, and yet our healthcare system isn't even rated #1. Why is THAT, do you think?

Now, I know some of you are going to be angry and get mad and a throw a fit, but this is why. I don't know if single payer is the answer, although some argue that it is. I know there MUST be some other ways to fix it.

6 Reasons Healthcare Is So Expensive in the U.S.

1. Administrative Costs
The number one reason our healthcare costs are so high, says Harvard economist David Cutler, is that “the administrative costs of running our healthcare system are astronomical. About one quarter of healthcare cost is associated with administration, which is far higher than in any other country.”

One example Cutler brought up in a discussion on this topic with National Public Radio was the 1,300 billing clerks at Duke University Hospital, which has only 900 beds. Those billing specialists are needed to determine how to bill to meet the varying requirements of multiple insurers. Canada and other countries that have a single-payer system don’t require this level of staffing to administer healthcare.

2. Drug Costs
Another major difference in health costs between the U.S. and every other developed nation is the cost of drugs. The public definitely believes drug costs are unreasonable; now politicians are starting to believe that too. In most countries the government negotiates drug prices with the drug makers, but when Congress created Medicare Part D, it specifically denied Medicare the right to use its power to negotiate drug prices. The Veteran's Administration and Medicaid, which can negotiate drug prices, pay the lowest drug prices. The Congressional Budget Office has found that just by giving the low-income beneficiaries of Medicare Part D the same discount Medicaid recipients get, the federal government would save $116 billion over 10 years. Think of what the savings might be if all Medicare recipients could benefit from Medicaid-negotiated drug prices!

3. Defensive Medicine
Yet another big driver of the higher U.S. health insurance bill is the practice of defensive medicine. Doctors are afraid that they will get sued, so they order multiple tests even when they are certain they know what the diagnosis is. A Gallup survey estimated that $650 billion annually could be attributed to defensive medicine. Everyone pays the bill on this with higher insurance premiums, co-pays and out-of-pocket costs, as well as taxes that go toward paying for governmental healthcare programs.

4. Expensive Mix of Treatments
U.S. medical practitioners also tend to use a more expensive mix of treatments. When compared with other developed countries, for example, the U.S. uses three times as many mammograms, two-and-a-half times the number of MRIs and 31% more Caesarean sections. This results in more being spent on technology in more locations. Another key part of the mix is that more people in the U.S. are treated by specialists, whose fees are higher than primary-care doctors, when the same types of treatments are done at the primary-care level in other countries. Specialists command higher pay, which drives the costs up in the U.S. for everyone.

5. Wages and Work Rules
Wages and staffing drive costs up in healthcare. Specialists are commanding high reimbursements and the overutilization of specialists through the current process of referral decision-making drives health costs even higher. The National Commission on Physician Payment Reform was the first step in fixing the problem; based on its 2013 report, the commission adopted 12 recommendations for changes to get control over physician pay. Now it is working with Congress to find a way to implement some of these recommendations.

6. Branding
“There is no such thing as a legitimate price for anything in healthcare,” says George Halvorson, the former chairman of health maintenance organization Kaiser Permanente. “Prices are made up depending on who the payer is.”

Providers who can demand the highest prices are the ones that create a brand everyone wants. “In some markets the prestigious medical institutions can name their price,” says Andrea Cabarello, program director at Catalyst for Payment Reform, a nonprofit that works with large employers to get some control on health costs.



Read more: 6 Reasons Healthcare Is So Expensive in the U.S. | Investopedia 6 Reasons Healthcare Is So Expensive in the U.S.
Follow us: Investopedia on Facebook

All of this is trivial in comparison to the inverted incentive structure created by too much insurance. They are all easily kept in check by consumers making sane value decisions. That's the missing piece. No one cares what their health care costs because no one is paying for it.

I do. I pay $37.50 a week for single coverage. I'm healthy, so I chose the "plan B" option which is a higher co-pay and higher costs for medications, but lower overall cost to me.

 

[ChrisL]

Actually, I don't know if my insurance plan covers prescriptions at all, now that I think about it. I would have to go through all my papers and find that section and reread it, but anyway, since I don't see a doctor except for occasionally, I didn't go for the better plan.

 

[Boss]

So, if you suddenly become sick and lose your job because you can no longer perform it due to your medical problems, and you lose your health insurance, then what? Rely on charity? Well, a lot of food pantries (which rely on the "charity" of people), don't even have enough food to feed all the homeless, so imagine expecting them to come up with 10,000 or 20,000 a month for your medication. And you are just one of many, many, many people.

Jesus aged Christ.... Chris, there is a tear-jerking, heartbreaking story every day! We do not live in a universe where no one suffers or has to do without. That doesn't exist in our reality. The only place it does exist is in the minds of little children and progressive liberals. Tinkerbell comes down with her magic wand in a swirl of stars and makes everything better.

In the real world where grown adults live, there are always some people who suffer and do without. No plan or idea that you have is going to make doctors do what they do for less money. Drug companies have to earn a profit. Hospitals have to pay staff. These things are expensive and simply passing it off to government doesn't make it cheaper. It also doesn't ensure it's more available.

The best and most efficient way to provide quality healthcare to the most people is through free market capitalism with less government interference. Does it mean no one will ever suffer or do without? No, but that's a fantasy.

 

[dblack]

Actually, I don't know if my insurance plan covers prescriptions at all, now that I think about it. I would have to go through all my papers and find that section and reread it, but anyway, since I don't see a doctor except for occasionally, I didn't go for the better plan.

You, like most of us, are paying for health insurance, not health care. And that's exactly the problem. We rarely have any incentive to look for bargains when it comes to health care. In fact, once it's clear that costs will exceed the deductible, we have the opposite incentive. At that point, a consumer is foolish not to choose the most expensive option at every decision point. And the doctor will enthusiastically agree. With that kind of dynamic, you can't not have crazy inflation of prices.

 

[Boss]

I was at Rhode Island Hospital last year to visit my grandmother when she was there, and that place is like . . . unbelievable. It has a museum and a big fish tank built into the wall, leather couches and flat screen TVs everywhere. The place is NICE. Too nice. They are a hospital for goodness sake!

And... If you look around a bit and pay attention.... 9 out of 10 times, you'll find some kind of small placard or sign expressing gratitude to someone who's contribution made those things possible. Not always, but most of the time. Yes, some hospitals do seem to go to the extreme but you have to keep in mind, they are in competition with other hospitals. Would you, as a consumer, rather have your hip replacement surgery at the hospital with the big fish tank in the wall, museum and leather chairs... or the one that looks like the county free clinic? I mean, one can say these aesthetic things don't matter but really, they do.

 

[ChrisL]

I was at Rhode Island Hospital last year to visit my grandmother when she was there, and that place is like . . . unbelievable. It has a museum and a big fish tank built into the wall, leather couches and flat screen TVs everywhere. The place is NICE. Too nice. They are a hospital for goodness sake!

And... If you look around a bit and pay attention.... 9 out of 10 times, you'll find some kind of small placard or sign expressing gratitude to someone who's contribution made those things possible. Not always, but most of the time. Yes, some hospitals do seem to go to the extreme but you have to keep in mind, they are in competition with other hospitals. Would you, as a consumer, rather have your hip replacement surgery at the hospital with the big fish tank in the wall, museum and leather chairs... or the one that looks like the county free clinic? I mean, one can say these aesthetic things don't matter but really, they do.

You just don't get it. The hospitals are charging a LOT of money to the patients to have these unnecessary luxuries. How about they spend the money on patients?

 

[sartre play]

The problem is that I don't trust free market capitalism any more than I trust the government, maybe less.

 

[dblack]

The problem is that I don't trust free market capitalism any more than I trust the government, maybe less.

That's fine. For me, it depends on the business. Some are trustworthy, some aren't. But they don't put a gun to your head and force you to do business with them. Government does.

 

[Boss]

The problem is that I don't trust free market capitalism any more than I trust the government, maybe less.

No offense, but either you don't understand what free market capitalism is or you're a moron. Free market capitalism is the voluntary exchange of goods and services for remuneration where price is driven by competition as well as supply and demand. So if you don't trust it, what you're saying is, you don't trust yourself to make sound voluntary purchasing decisions.

Now that's all good and well, but turning your purchasing power over to government bureaucrats who couldn't care less about the value or quality of what they purchase for you, is never going to be better.

 

[Boss]

I was at Rhode Island Hospital last year to visit my grandmother when she was there, and that place is like . . . unbelievable. It has a museum and a big fish tank built into the wall, leather couches and flat screen TVs everywhere. The place is NICE. Too nice. They are a hospital for goodness sake!

And... If you look around a bit and pay attention.... 9 out of 10 times, you'll find some kind of small placard or sign expressing gratitude to someone who's contribution made those things possible. Not always, but most of the time. Yes, some hospitals do seem to go to the extreme but you have to keep in mind, they are in competition with other hospitals. Would you, as a consumer, rather have your hip replacement surgery at the hospital with the big fish tank in the wall, museum and leather chairs... or the one that looks like the county free clinic? I mean, one can say these aesthetic things don't matter but really, they do.

You just don't get it. The hospitals are charging a LOT of money to the patients to have these unnecessary luxuries. How about they spend the money on patients?

As someone pointed out earlier, very few patients are paying the bill. This falls on the insurance companies who pass the cost of claims to the consumer in the way of premiums. And AGAIN... if you have the choice of Hospital A: fish tanks, leather chairs, museums... or Hospital B: plain Jane, bare bones, nothing fancy... which one are YOU likely to pick? Let's draw the same analogy for anything... a restaurant, a clothing store, a hotel.... do you usually pick the nicely appointed one or the bare bones plain one? All things being equal, you pick the nice one. It's just how people are. Now, either way, you're only having to pay your deductible.... so you're saving nothing by choosing the lesser appointed hospital.

And AGAIN.... 9 out of 10 times, those "luxuries" are paid for through philanthropic donations to the hospital.

 

[The Sage of Main Street]

The problem is that I don't trust free market capitalism any more than I trust the government, maybe less.

WALKING TALL BY WALKING ALL OVER PEOPLE

A free market means that the few who always control any real-life market are free to do anything they want. These oligarchs want to make as much money as they can, as fast as they can, any way they can. Combined action is the only way to prevent their Freedom Rides. Only the power of numbers can overthrow the power of concentrated wealth.

 

[Boss]

The problem is that I don't trust free market capitalism any more than I trust the government, maybe less.

WALKING TALL BY WALKING ALL OVER PEOPLE

A free market means that the few who always control any real-life market are free to do anything they want. These oligarchs want to make as much money as they can, as fast as they can, any way they can. Combined action is the only way to prevent their Freedom Rides. Only the power of numbers can overthrow the power of concentrated wealth.

This is the Big Lie that Socialists want you to believe but it's just not true. Sure, all capitalists want to make as much money as possible. In countries where the capitalism is controlled by government oligarchs, much of what you say is true. However, in a free market system, that's not the case because you have free enterprise and competition. The presence of competition means there can be no such thing as a "greedy capitalist" because another less-greedy capitalist comes along and steals your business. Free market capitalists rely on satisfying consumer demands. When those demands aren't being met, someone utilizes free enterprise to offer an alternative more suitable to the consumer.