Our Next President?

[dcarrigg]

Re: Our Next President?

I guess I just want to be clear about one thing:

The federal government does not regulate the prices Medicare pays for healthcare services in any way that's recognizably true price regulation. The federal government does negotiate the prices Medicare pays for healthcare services to an extent.

There's a big difference between public utility rate setting and CMS negotiated Medicare charge rates. The hospital methods are nearly incomprehensible and complicated for the scope of what we can do here. But look at the clinical and lab price setting. How do they do it?

1. Establish an advisory panel made up of industry players to recommend rates.
2. Consult with panel and take panel recommendations under advisement.
3. Collect private payer data from sample reporting labs.
4. Verify data and estimate market rate for private insurance payments.
5. Do a rain dance and say a voodoo chant.
6. Select a price somewhere between the panel recommendations and the private rates for last year (adjusted for prospective price inflation).
7. Negotiate with providers to see if they'll accept that price, which 90% of them do, because look at the previous steps.

This is a fundamentally different process than public utility rate setting. That works more like this:

1. Quasi-judicial board or commission calls a rate hearing.
2. The state defends ratepayers, the utilities request higher amounts.
3. Costs are calculated and questioned. Corporate books are open to regulators.
4. Board or panel makes a ruling and issues a rate tariff based on the case.
5. Rate goes into effect on the date ordered by the commission.

The former case is a convoluted way to attempt to back into market rates. There is no real hard force behind it. The goal isn't to price-set or control rates. The goal is only to mimic imagined market rates. But the fox runs the henhouse. The panel's made up of industry, and every surveyed provider knows if they lower their rates for private insurers, they'll get screwed on their Medicare rates next year. Consequently rates never go down. The latter is an adversarial process that takes real costs, inflation, and depreciation etc. into account, but which at times will drive prices down and control them.

I guess, technically, these are both under the umbrella of "regulation."

But they're two very different things.

[DSpencer]

Re: Our Next President?

The law doesn't allow for this. CMS can't just do it. They're not allowed to regulate prices. Ditto with state health insurance commissioners. They can't either. At least not without federal approval. Average charges range from over $400k per inpatient visit to under $1k, depending on the hospital. That's the Medicare range. Lord knows what that range is for private insurers. Medicaid is even more complex. There are special higher reimbursement rates for FQHCs, look-alikes, and others vs. standard rates. And they vary all over the place too.

But the whole thing is that the whole existence of the payment intermediary arose due to a lack of price regulatory power. Once people have it in their heads that a payment intermediary is necessary, the best they can imagine is something like Medicare for All, because "better negotiating power" is the only way they can imagine to control prices and cover everyone. Of course, if you want to control prices, you could actually just do it directly.

But whatever. One way or the other, a change is gonna come. At current price growth rates, average family premiums will equal 100% of median family income by 2033. The only question is whether we stubbornly cling to the existing system until we hit a second great depression, or whether we actually do something about it before then. Doing nothing will precipitate a complete retool of the US health sector almost as quickly as doing something at this point. The status quo is no more sustainable than radical change.

California was looking at regulating prices at least for the 60% you're talking about. So far no go. There are lots of entrenched players in the politics game side of this.

I should have been more precise, but it's just semantics to me. The federal government controls Medicare. The federal government regulates the prices that Medicare pays for healthcare services. The federal government controls how a hospital must bill for their services if they want to get paid by Medicare. Despite all that, the billing for Medicare services is not simple like a utility bill.

Personally, the public option seems more appealing to me all the time. If it's truly a self sufficient program paid for by the people who use it, then it's not "socialized medicine". If it's voluntary then nobody can complain about being forced into some dystopian government program. If it ends up being significantly better, then it will just become a de facto single payer anyway.

[dcarrigg]

Re: Our Next President?

So what are the "good" countries to study in now? (And what language should I make sure my daughter studies?) Germany?


Actually, my boss (a German transplant) was just on a rant about (stem) PhD programs in the U.S. vs Europe. He thinks the U.S. programs are too directed. (Basically, that the U.S. prof typically finds your research topic for you.) He has organizations in both regions and hires PhDs.

I think it's heavily dependent on what she'd want to study, what kind of schools she's looking for, and the sorts of places she can get into.

Germany's a good option. American students heading there have been increasing by 20% y/y. No tuition in many places. Good schools. Usually only have to have about $7k in the bank for the visa. PhD process is tougher than the US, but respected. UK is easier, but somewhat less well regarded. Might want to check out Luxembourg. Norway often has no tuition either, and cheap Norway Air flights from JFK. They have a range of programs in English.

If you want something closer, Canada's not a terrible option. Easy flights. If you're in North Jersey, may not even be that bad of a drive. If you're thinking some sort of liberal arts school or other sort of specialized PUI, the top ones north of the border are running maybe $24k per year USD all-in (room, board, healthcare, tuition, fees, etc). Compare it to comparable US institutions that'll probably run you $70k. Canadian class sizes might tend to be a bit bigger at those things, but they're pretty good, and they generally are directly comparable to US degrees.

Of course, the rest of Europe isn't a bad option either. And there are increasingly good options in Asia too. This page is pretty good. Think up a major you'd want to study and a country you might be interested in and see what the options and costs and visa requirements are. So just type in "biology" and "europe" or something and sort by tuition. It's not perfect, but it's a good jumping off point to hunt down affordable English-language programs. Hell, if you can manage to go to Ireland for $4k per year tuition, get the experience and save a pile of cash, why the hell not?

[dcarrigg]

Re: Our Next President?

I think it's a stretch to say that hospital billing would be as simple as electric utility billing if only it were regulated. But we don't have to think about it in hypothetical terms anyway. If all it takes to simplify the system is for the government regulators to step in and put their foot down, then why is it still so complicated?

The Federal government already has the power to control this. The majority of patients in hospitals are covered by Medicare or Medicaid. If they say "CMS now pays a flat hourly rate for hospital care" then it's done. The hospitals will either bill by the hour or not get paid by CMS and lose ~60% of their patients. The hospitals don't get to decide how this works. CMS decides what is covered, how much it pays, what codes and forms must be used, what quality standards must be met, etc.

If Medicare did a good job, I don't think we'd be having this discussion. We'd already have some kind of single payer or medicare for all or public option. It would have been a tale of two payers where Medicare was obviously better and everyone except for insurance company employees would be begging for its expansion.

The law doesn't allow for this. CMS can't just do it. They're not allowed to regulate prices. Ditto with state health insurance commissioners. They can't either. At least not without federal approval. Average charges range from over $400k per inpatient visit to under $1k, depending on the hospital. That's the Medicare range. Lord knows what that range is for private insurers. Medicaid is even more complex. There are special higher reimbursement rates for FQHCs, look-alikes, and others vs. standard rates. And they vary all over the place too.

But the whole thing is that the whole existence of the payment intermediary arose due to a lack of price regulatory power. Once people have it in their heads that a payment intermediary is necessary, the best they can imagine is something like Medicare for All, because "better negotiating power" is the only way they can imagine to control prices and cover everyone. Of course, if you want to control prices, you could actually just do it directly.

But whatever. One way or the other, a change is gonna come. At current price growth rates, average family premiums will equal 100% of median family income by 2033. The only question is whether we stubbornly cling to the existing system until we hit a second great depression, or whether we actually do something about it before then. Doing nothing will precipitate a complete retool of the US health sector almost as quickly as doing something at this point. The status quo is no more sustainable than radical change.

California was looking at regulating prices at least for the 60% you're talking about. So far no go. There are lots of entrenched players in the politics game side of this.

[LazyBoy]

Re: Our Next President?

So what are the "good" countries to study in now? (And what language should I make sure my daughter studies?) Germany?


Actually, my boss (a German transplant) was just on a rant about (stem) PhD programs in the U.S. vs Europe. He thinks the U.S. programs are too directed. (Basically, that the U.S. prof typically finds your research topic for you.) He has organizations in both regions and hires PhDs.

[DSpencer]

Re: Our Next President?

Does the electric company sell a single product? Or does it appear that way thanks to regulation? I mean, if you stop and think about it off the top of your head, they're selling poles, wires, distribution lines, transmission lines, pole space for telecom use, repair services, ballasts, street lighting, transformers, ground trenches, load balancing and monitoring services, interconnection services, transfer stations and substations, power transition services, tree clearing services, preventative maintenance services, billing passthrough services for third party power providers, demand-side management programs, etc etc etc.

The regulators say, "Wrap all that stuff up into a standard kWh charge." But if they didn't, I'd bet you anything there'd be 5,000 charges for all these little things meted out. Because they could. And since they own the only grid connected to your house, they could charge you whatever. Thus is the nature of natural monopoly.

I think it's a stretch to say that hospital billing would be as simple as electric utility billing if only it were regulated. But we don't have to think about it in hypothetical terms anyway. If all it takes to simplify the system is for the government regulators to step in and put their foot down, then why is it still so complicated?

The Federal government already has the power to control this. The majority of patients in hospitals are covered by Medicare or Medicaid. If they say "CMS now pays a flat hourly rate for hospital care" then it's done. The hospitals will either bill by the hour or not get paid by CMS and lose ~60% of their patients. The hospitals don't get to decide how this works. CMS decides what is covered, how much it pays, what codes and forms must be used, what quality standards must be met, etc.

If Medicare did a good job, I don't think we'd be having this discussion. We'd already have some kind of single payer or medicare for all or public option. It would have been a tale of two payers where Medicare was obviously better and everyone except for insurance company employees would be begging for its expansion.

[dcarrigg]

Re: Our Next President?

Then the way forward is to include the capability towards patient travel; towards a much more competitive location on the planet.

Hear, hear! I was talking in an earlier thread about the US potentially becoming a net exporter of students by 2030. And this will be a big part of that.

One weird thing that's popping up lately is universities largely running their own health insurance and delivery racket, and not even just ones with med schools. They'll set up a treatment clinic and pharmacy and then push to sell or auto-enroll students in their fee and insurance schemes. They require students to have coverage. The insurance itself can easily run over $5k per year.

So let's get concrete. Stanford's up to $5,208. Relatively cheap, by US insurance standards, but students are also a younger, healthier population generally. Thing is, on top of that, there's a health fee of $217 per quarter, so about $6k per year we're up to now. But that's not all. Need to be admitted to Stanford Hospital during that time? $500 co-pay. Then there's a deductible. Want to use the medical center you pay $217 per quarter fees to access and $5,208 per year to insure against? You pay between $25 and $35 co-pays each time depending on what you go for. Go to any other hospital or doctor (say you went home for the summer), and you owe 30% of the bill in co-insurance for certain covered procedures, for many others (including all mental health, etc), you owe 100% and insurance will not cover it.

Big take-away: It's probably easy to drop $40,000 in health costs alone on the cost of a 4-year education there, even if one is not very sick. That's significant, even if tuition is running a bit over $200,000 for 4 years. It's a 20% adder during a time when many are not earning income. But, let's say you get a side-job. CA minimum is up to $11/hr now. Say you worked about ~20 hours at a part-time job for that $11: that would only buy you only the health fees, and wouldn't even touch tuition or living expenses. Now, mommy and daddy might still claim you as a tax dependent and keep you on their family plans during this time, thanks to the delayed adulthood provisions from Obamacare. But doing so can have other negative student aid consequences when it comes time to fill out the FAFSA. And it might cost mommy or daddy more. Not to mention all the kids who don't have parents willing or able to do it.

You can see how foreign schools look better and better to middle class Americans and American schools look worse and worse to foreign students when you look at it this way. Top schools like Stanford will probably always have some pull for princesses and emirs around the world. But the layer just under them, and everything below, maybe not. But can you imagine, say, paying £7,500 or so per year just in student health insurance and fees? Oxford's whole tuition is what? £9,200? You'll pay that just for standard health coverage at comparable US schools. And it's growing compounded at 7% or so per year, doubling every 10, eating up a bigger and bigger share of the pie. While we spin our wheels about free markets and competition, it will just get worse and worse.

Lots of America's competitive edge rests solely on past reputation at this point. We're coasting on it. And if we don't get our act together, as more people wake up and realize the halcyon days are over and prices are really high here and quality not so great, trouble can brew up easily. The brain drain thing's a real threat. Combine anti-immigrant sentiment with outrageous university costs and health costs, and any animosity with huge countries like India or China, and you've got a recipe for net out-flow of students.

So think about that:

1. The US experienced a 6.6% drop in international student enrollment this year, on top of a 3.3% drop last year.
2. US students fleeing the US to study are up 2.3% this year, and have been growing steadily. Anecdotally, I think they're some of the sharpest middle class public school kids.
3. Health costs slowed between 2013 and 2014, but are now back up to between 5%-7% increases per year and growing since 2015.
4. Despite this, US life expectancy has dropped for consecutive years on end.
5. And health costs are still the number one source of bankruptcy in the US.

So here's what we have:

1. Fewer smart kids coming in.
2. More smart kids going out.
3. Unaffordable care prices, growing exponentially.
4. Falling life expectancy despite it.
5. Hospitals that have become a game of financial Russian roulette.

Time is not on our side on this one. I really don't think Americans can handle another decade of price doubling coupled with the rest of these trends. If there's not major change before 2030, we're gonna be in a very bad spot.

More than that, I don't think most people realize how close we are to the knife's edge on this one. The mandate exemption law not only takes the penalty for being uninsured away, but it also makes offering defined contribution (rather than real benefit) plans more attractive. It's especially attractive to small businesses. Where you may have gotten health insurance before, now you get the equivalent of a $300 per month coupon to go buy it on the exchange. And that $300 will not go up to keep up with health price inflation. With no tax penalty on the other side, we're in a rough spot. And states get strapped when recessions hit, and roll back medicaid coverage. It happened last time, but medicaid was much smaller then, before obamacare.

I think hardly anyone has priced in the possibility of a sudden, massive shift of about 10-50 million Americans from insured to uninsured in the wake of a recession, and the effects that will have rippling through all sorts of consumer spending and consumer debt. But I also think events have conspired to make such a thing much more probable, and increasingly likely with time.

[Polish_Silver]

Re: Our Next President?

That is an excellent point, DC. We need either competition or price regulation. In most places, medical services are not a monopoly, except that institutions keep the prices secret and prevent
any price comparison. Japan has regulated medical prices very succesfully. The problem here is collusion, information assymetry, lack of choice etc.
Physicians are licensed by the state. So what if part of the
licensing criteria was that they had to publish prices, treatment outcomes, etc. All this stuff gets reported now to the insurance companies, but not to the consumer.

Most of the cost is chronic degenerative illness, which means there is time to plan, compare prices, switch providers. But how can you choose with no information?
I think a state or university could set up a clinic open to the general public (or to employers) and offer care at much lower prices. I am surprised larger corporations (like my own)
have not created internal medical service systems.

[Chris Coles]

Re: Our Next President?

Then the way forward is to include the capability towards patient travel; towards a much more competitive location on the planet.

[vt]

Re: Our Next President?

The broken payer business model


https://www.innosight.com/insight/af...-in-new-faces/

[Chris Coles]

Re: Our Next President?

So, what you need is a new mindset within the insurance industry, prepared to directly challenge the existing system. That surely comes down to leadership; so the answer is to create a completely new mindset within the insurance industry. That in turn requires someone start a debate that will show up the present lack of the required leadership.

It beggers belief that there are no professionals within the insurance industry that see the need for reform.

[dcarrigg]

Re: Our Next President?

There is no doubt that the new transparency law is nearly worthless when the requirement allows the descriptions to be vague and cryptic to the point where they are unintelligible. Doubly so given that these prices are not the actual price for almost anyone.

Nonetheless, the complexity is not completely artificial. Sure, an electric company has a simple bill. They also sell a single product. Walmart and Lowes also have tens of thousands or more products on their price lists. Don't get me wrong, it can be simpler and it should be simpler. But, there's kind of a limit. There's thousands of medications alone, are they supposed to charge the same price for everything?

That Canadian price list is very simple. However, I find myself confused. Can you tell me how much it costs to get a total knee replacement? Or a c-section? Or a 2 level lumbar fusion? As far as I can tell, it's basically useless in determining how much something would actually cost.

The best transparency I'm aware of is probably the Surgery Center of Oklahoma:

https://surgerycenterok.com/pricing/

That's still a few hundred different prices and that's at an outpatient surgery center. And it only works because they don't take insurance and require payment in full up front.

Does the electric company sell a single product? Or does it appear that way thanks to regulation? I mean, if you stop and think about it off the top of your head, they're selling poles, wires, distribution lines, transmission lines, pole space for telecom use, repair services, ballasts, street lighting, transformers, ground trenches, load balancing and monitoring services, interconnection services, transfer stations and substations, power transition services, tree clearing services, preventative maintenance services, billing passthrough services for third party power providers, demand-side management programs, etc etc etc.

The regulators say, "Wrap all that stuff up into a standard kWh charge." But if they didn't, I'd bet you anything there'd be 5,000 charges for all these little things meted out. Because they could. And since they own the only grid connected to your house, they could charge you whatever. Thus is the nature of natural monopoly.

[DSpencer]

Re: Our Next President?

Different prices for different demos with different plans in different companies. There is no set price for an appendectomy. There are 75,000 different prices for different combinations of nonsense requiring a massive back-office (and lots of arbitrary judgement calls) just to figure out. It's like the blackout insurance all over again. Drug costs are a small fraction of hospital costs. I get that you have an instinctive aversion to regulated prices. But is the electric market really so horrible or socialist? I mean, even for free market fanatics, natural monopolies should still be a problem.

Just put ideology aside for a moment. Have you ever seen a hospital chargemaster? Here's Norton Hospital in Kentucky. Random example. It's actually a relatively cheap hospital. There are 1,567 pages of fees, each with 50 line-items on them. So you can see that I'm not making that 75,000 number up. Now compare that to Brigham and Women's here in Boston. Sorry, it's a .zip excel file. That's the only way they offer it. They have only maybe 7,000 or so charge codes. HC ASSEMBLY DRIVER PNEUM PACK #1006 costs $200,000. I have no ******* clue what that is, I can only pray to the Lord almighty in heaven I never need one.

Of course, these charges are the standard charges. Each insurance company negotiates some sort of discount off the sticker price for each individual plan. But here's the rub: You've got no way of knowing. There's literally 1,000 different codes for sterile supplies. You can't even fight these bills, because there's no way to even be sure services were rendered. All the negotiations in the world can't stop them from choosing to use one thing that's 10 times more expensive than a comparable thing in the course of treatment. And even if one hospital is cheaper than another (which matters at least for the deductible or out-of-network expenses, right?), there's no way to know or be sure. They don't even have apples-to-apples chargemaster categories. Instead of regulating prices, we turned it into the wild west, and now there's literally thousands upon thousands of pages of things you might be charged for once you step foot in the hospital, and there's no rational way to figure it out anymore.

Meanwhile, just a couple hundred miles north of me in Canada, they do it like this. A single, intelligible page of regulated prices, even for non-covered, non-residents. They even have some for-profit hospitals. It's not impossible. But if we do nothing to regulate prices, we'll continue to have this rube goldberg madness. There are over 100,000 Americans employed in just figuring out hospital charges. About one for every MD. More people than work for Alphabet worldwide. They built pages and pages of charge lines for their own services. I mean, if you hold ideology aside, and look at it like an alien being dropped on earth examining different health systems, you'd surely have to conclude that the unregulated price madness of the US system is the most ludicrous system in the world.

There is no doubt that the new transparency law is nearly worthless when the requirement allows the descriptions to be vague and cryptic to the point where they are unintelligible. Doubly so given that these prices are not the actual price for almost anyone.

Nonetheless, the complexity is not completely artificial. Sure, an electric company has a simple bill. They also sell a single product. Walmart and Lowes also have tens of thousands or more products on their price lists. Don't get me wrong, it can be simpler and it should be simpler. But, there's kind of a limit. There's thousands of medications alone, are they supposed to charge the same price for everything?

That Canadian price list is very simple. However, I find myself confused. Can you tell me how much it costs to get a total knee replacement? Or a c-section? Or a 2 level lumbar fusion? As far as I can tell, it's basically useless in determining how much something would actually cost.

The best transparency I'm aware of is probably the Surgery Center of Oklahoma:

https://surgerycenterok.com/pricing/

That's still a few hundred different prices and that's at an outpatient surgery center. And it only works because they don't take insurance and require payment in full up front.

[dcarrigg]

Re: Our Next President?

Different prices for different demos with different plans in different companies. There is no set price for an appendectomy. There are 75,000 different prices for different combinations of nonsense requiring a massive back-office (and lots of arbitrary judgement calls) just to figure out. It's like the blackout insurance all over again. Drug costs are a small fraction of hospital costs. I get that you have an instinctive aversion to regulated prices. But is the electric market really so horrible or socialist? I mean, even for free market fanatics, natural monopolies should still be a problem.

Just put ideology aside for a moment. Have you ever seen a hospital chargemaster? Here's Norton Hospital in Kentucky. Random example. It's actually a relatively cheap hospital. There are 1,567 pages of fees, each with 50 line-items on them. So you can see that I'm not making that 75,000 number up. Now compare that to Brigham and Women's here in Boston. Sorry, it's a .zip excel file. That's the only way they offer it. They have only maybe 7,000 or so charge codes. HC ASSEMBLY DRIVER PNEUM PACK #1006 costs $200,000. I have no ******* clue what that is, I can only pray to the Lord almighty in heaven I never need one.

Of course, these charges are the standard charges. Each insurance company negotiates some sort of discount off the sticker price for each individual plan. But here's the rub: You've got no way of knowing. There's literally 1,000 different codes for sterile supplies. You can't even fight these bills, because there's no way to even be sure services were rendered. All the negotiations in the world can't stop them from choosing to use one thing that's 10 times more expensive than a comparable thing in the course of treatment. And even if one hospital is cheaper than another (which matters at least for the deductible or out-of-network expenses, right?), there's no way to know or be sure. They don't even have apples-to-apples chargemaster categories. Instead of regulating prices, we turned it into the wild west, and now there's literally thousands upon thousands of pages of things you might be charged for once you step foot in the hospital, and there's no rational way to figure it out anymore.

Meanwhile, just a couple hundred miles north of me in Canada, they do it like this. A single, intelligible page of regulated prices, even for non-covered, non-residents. They even have some for-profit hospitals. It's not impossible. But if we do nothing to regulate prices, we'll continue to have this rube goldberg madness. There are over 100,000 Americans employed in just figuring out hospital charges. About one for every MD. More people than work for Alphabet worldwide. They built pages and pages of charge lines for their own services. I mean, if you hold ideology aside, and look at it like an alien being dropped on earth examining different health systems, you'd surely have to conclude that the unregulated price madness of the US system is the most ludicrous system in the world.

[DSpencer]

Re: Our Next President?

You're not wrong. I still don't think it would have a major effect on the underlying cost structure. Even if you abolish employer sponsored healthcare and force everyone on to the exchanges, the price would remain high for all the reasons I outlined earlier. The incentives just don't work; when you need a hospital stay, there's really no good way to shop around or even determine prices ahead of time. It all just reminds me of Crassus' private sector fire brigades. When your customers are necessarily vulnerable, you can squeeze them for whatever you want.

I'm not sure why you say there's no good way of determining prices for a hospital stay ahead of time. The vast majority of prices are negotiated by insurance companies ahead of time. I understand the argument that you can't negotiate the price of healthcare while you bleed out in an ambulance, but the reality is that is not the real problem with US healthcare. The hospitals are already required to treat you regardless of your ability to pay. If you're broke, that's their problem. If you're not, you probably have insurance that's negotiated the price in advance. I understand there's exceptions, but those aren't what's driving the US spending levels so high.

Another easy change: let Medicare negotiate prescription drug prices. This is just self-imposed insanity that we won't let our largest healthcare payer negotiate prices for drugs.

Another easy change: allow for import of drugs from other countries. This is another scenario where the regulations hamstring us and then we decry the failure of our "free market".

The US essentially subsidizes drug innovations for the world. It's probably true that we would get less new drugs if we stopped. It also seems that we've reached the tipping point where affordability is the greater concern.

Maybe it still wouldn't be enough. But when we do everything but the obvious changes, it makes me question whether anyone is really trying.