In a new article, Bitter Pill: Why Medical Bills Are Killing Us, Time Magazine delves into why medical bills are so high. 

I had a fibrous cyst creating a boil on my neck several years ago. After a round of antibiotics, a doctor performed a 15 minute outpatient surgery, assisted by a nurse, in an examination room. It wasn't even an operating room. Local anesthetic was used. The incision was about 3/4", and I was given a prescription for Vicodin I really didn't need before I left. 

The bill was about $850. I was shocked. I might have expected $250, but $850?

Well, $850 is nothing in today's medical world. 

Time describes instances of non-life threatening household accident injuries that run up bills in the five figures. More serious problems like treating cancer can run up bills in the six- and seven-figure range with ridiculous line items described in excruciating detail in the article.

What makes the pain of high healthcare costs worse is that the health care providers seem to be profiteering with markups that are as outrageous as they are unjustified. So-called "nonprofit" hospitals are actually profit-making institutions. Have you noticed how your local hospital is adding on new additions like crazy while the rest of the economy is slow. It's a boom economy in healthcare, forcing unjustifiable costs on a public suffering in a totally separate economy.

The article argues something I've already written about here: the healthcare industry isn't a normal market and doesn't really operate in the normal economy the rest of us have to live in. It doesn't compete for the business it gets and there's very little operating to restrain their costs. Yes, your insurance company probably gets a discount of 40%-50%, but even with that discount it's hard to justify the line items on the bills. 

Of course, there are people who can't pay their bills and become write-offs and they become part of the high cost of healthcare, but not such a large part that bills need to be as high as they are. Likewise, insuring themselves against lawsuits filed by people who can't accept that (a) shit happens or that (b) some people's conditions are terminal no matter WHAT care they get is a costly problem.

Putting some controls on the legal problems the industry faces is an obvious need, and one that can be addressed. However, the reasons for high healthcare have mostly to do with greed—getting whatever the traffic will bear—rather than providing the best service possible at a reaonable price. It's an industry that has forgotten that its primary purpose is to provide a service, not to break the back of those it serves with unjustifiably high expenses.

Look, I like capitalism, but I've come to decide that there are places where capitalism doesn't work. We don't want police and fire departments, libraries, and parks to be run on a "what the market will bear" basis. I would think that we especially don't want our healthcare system run that way.

You have no better argument for socializing medicine than the system we have now.

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Most of the non profit "Discovery's" are bought by for profit companies. That is the dirty little secret about this, it's all for profit, if it's not then no need to release it.

Committees don't have ideas, individuals do.

individuals can have concepts or a hypothesis. real end results requires a group, real proof demands a group or committee. One may conceptualize the discovery while 10 other groups try to prove it and/or debunk it. Its slow and painful. Your concept gets dragged and voted on. Re-tested and all the while it finally becomes initially proven, YEAH!! So now you get all the credit but some might say the dreaded "committee" did most of the hard work.

Capitalism assumes growth in the sense of growing its business. That can mean no more than taking business away from the competition.

not true. industry's like oil need not only more customers but more oil to produce more things for our consumption. thats why its called consumption. This is just one example. If the free markets really checked itself (which is NOT what a free market is supposed to do) they might be able to slowly grow. that is the whole point to rampant capitalism consumers consuming as much as possible.

The AIDS cocktail funded by both private and public funds worldwide was a group committee effort, NASA would be another. Every research lab private or public has several scientist on staff that add to every discovery.

"Capitalism assumes growth in the sense of growing its business."

No, under capitalism, the entire system must grow or die. Otherwise what's wrong with the recession we're in now? The economy is still growing, but too slowly to give investors enough ROI to meet their debts. 

" taking business away from the competition."

Yes, that's necessary, too. In order to succeed under capitalism, you either have to come up with some earth-changing idea or fuck over the other guy and take his living from him. The REAL capitalists these days, the banking and investment clique, are no longer satisfied with ruining other business, they've decided they need to take Ma and Pa's retirement money - ergo derivatives.

The ONLY thing that can stop these predatory parasites is harsh government regulations. 

The ideal system would be one where everyone had ENOUGH. As it is now the only way to keep score is money. And getting obscene amounts of money in a closed system such as ours means taking from others. Capitalism promotes that. Anyone who thinks that there would be no incentive for people to innovate and make the world a better place without screwing over others and acquiring obscene wealth has simply drunk the capitalists cool-aid. I understand that. Hell, almost HALF the population is willing to vote against their own best interests because the corporates tell them God is on their side.

". . .which were the result of committees"

Oh, I forgot. Capitalists don't have committees.

" it's not clear that capitalism works there"

I think it's VERY clear it DOESN'T work there.

The cost, at the time of writing the check is bad enough. The REAL cost is spending your lives wondering, even with your "good" coverage, what will and will not be covered when you need it.

Since I moved to Christchurch from Chicago 35 years ago, I haven't spend ONE MINUTE wondering if my health events/conditions will be treated. I've had a wide variety of hospital procedures - compound tibia fracture, hip replacement, 8 stents in my heart and, most recently, a bypass. Total cost? I have no idea. I've never seen any kind of bill. The subject of money has never arisen. When comparing our tax rates, please include your insurance premiums and whatever excess you pay over and above that. Also include the cost of your personal liability insurance. I cover that below.

My care has been outstanding.

Surprisingly the health insurance industry in NZ is thriving. There are lots of people who "need" a private room (there are 4-6 beds per room in public hospital - my only comment about that is that means the nurses are closer). Some people want their boils removed NOW. Health insurance would cover that and I HIGHLY doubt that you would pay $200 in excess. A Boil, like my hip replacement, is, essentially, elective surgery in that failure to provide medical intervention would not usually be life-threatening. If it IS life-threatening you're on the operating table in minutes.

Waiting Lists - That's the MAIN complaint people have against health systems like NZ's. Placed on the scale beside NEVER having to worry, and the answer (to me) is clear.

A few months ago I went in for an angiogram (in preparation for the bypass). I was ON THE OPERATING TABLE, and they came in, "sorry - urgent problem", and took me back to the ward to wait another hour. Big F#ng deal. 

Two major things make the US system intolerably expensive; profit and liability. If I asked for an aspirin, the nurse would check my chart, go get me an aspirin, and update my chart. In the US they have to charge, what?? $30. Actually the administrative cost of recording each aspirin and paper clip to recoup costs (and generate profit upon)  is probably, in many cases, higher than the cost or the good or service provided. NZ has solved the liability problem, too. We have the ACC (Accident Compensation Corporation) (the Government) . When I broke my tibia, they paid 80% of my salary for the three weeks I was off work (they would pay that 80% for LIFE, if necessary) and then paid my taxi fare to and from work for the months where I was in a cast and couldn't drive. In the end they compensated me $3000 (even though I didn't really have any permanent disability). Here's the important bit. I am NOT ALLOWED to sue the dude who backed out of his drive without looking. In The States he would have been sued for what?? at least $500,000? Who pays for this?

The US health system is truly ill - even after ACA - and will continue to be broken until you stop paying 80% to insurance companies and lawyers, neither of whom actually provide ANY health care.

8 stents? You need to see the video Forks over Knives right away. Based on solid research ( not woo) by a heart surgeon at the Cleveland Clinic. I met one of his patients that had 17 stents and tgey told him he didn't have room for more. He had 6 months to live in 2008, but is alive today and is heart disease free .

I don't see your point. Sounds like you're saying my 8 stents is something to worry about but 17 stents is a good thing. Could you rephrase, please?

As far as I can tell at this early stage, I too am heart disease free. 

No, I'm saying that he could have avoided further problems. Pick it up at your local library or you can stream it from Netflix or other sources. The basic premise is that the "western " diet is the primary cause of heart disease.

A few apparently disconnected observations.

I can personally attest to the fact that the uninsured get slapped with a bigger bill than those with insurance; it makes no sense.  I saw a bill of mine get reduced 90% because I was insured albeit with a high deductible (my choice, I am not griping about that); my insurance barely had to pay anything in fact.  Had I not been insured, I'd have had to pay ten times as much.

One thing I noticed--at least in the parts of the article that I read, is that there doesn't seem to be any actual accounting for the labor costs; they will say such and such test costs 38 dollars, but does that include the labor of the (very highly trained and compensated) people doing the work?  If the test takes an hour's worth of labor to perfrom (even if its six people for an average of ten minutes apiece) I can guarantee you the true cost of the test is a LOT more than 38 dollars.

One bit of entirely parasitic overhead in our system is the armies of people in each doctor's office whose sole job it is to bill the insurance company!  They will do this of course even if you haven't hit your deductible yet.

Is it insurance when routine maintenance is paid for by the insurance company?  If auto insurance worked like this, Geico would pay for oil changes--and they would genuinely cost twice as much, because some guy at the oil change place would have the job of filing the paperwork with the insurance company, and he needs to be paid.

We have a model in the US where not only does "insurance" pay for routine work (not just disasters), but we for the most part don't even pay for our own insurance!  It's chosen for us by our employers and it's often the case we can't get the plan we want because either a) said plan is illegal due to some government reg or b) the company just doesn't offer it.  Then of course many dare not leave a shitty job for fear of losing that insurance. This situation is in large part the result of a tax code that allows employers to write off the cost of their employees' health insurance but we as individuals, cannot (at least not until that cost exceeds 7.5% of our income, and then ONLY the portion that does).  The result though, is that you do NOT have effective control over your own health coverage.

So we have parasitic drains on a system where the actual customer usually (but not always) has little to no incentive to control costs, after all someone else is paying for it.

To repeat the first part, I am not sure why the uninsured get socked for such huge bills--I know in many cases they simply end up not paying (it's the law in the US that no one can be refused care in an emergency room even if it's obvious they have zero money); I would have to consider the possibility that they are hoping some percentage of people will pay the huge bill and make up for the rest.

Unfortunately, the healthcare system works poorly both in a privatized and socialized setting. The private sector use the price mechanism to discriminate, the public sector use queuing. A running joke here is that we may have free abortions, but they have a 10 month waiting period. 

Since we use personal anecdotes I can use my parents as examples. Around 15 years ago my father started having problems with his hip. He went to his doctor which scheduled him for a specialist appointment, which had a waiting period of 4 months. When he was seen he was immediately scheduled for a hip replacement. a few weeks after seeing the specialist he could barely walk and was in so much pain he had to go into sick leave from his job. From the specialist referral to the operation there was an 8 month waiting period, and he ended up being away from work and in excruciating pain for almost a year. About 5 years later it was the same story with the other hip, but that time the process had sped up somewhat, and the process took less than a year and he was away from work around half a year.  

My mother had a botched back operation in the early 80ies. It took her almost 20 years of fighting the bureaucracy to get the maximum compensation, around $10k, and receive disability insurance as the surgeon fought her all the way until he retired. 

There have been some improvements since my parents' ordeals, the waiting period for hip replacements are today 5-6 months as far as I can tell, and the compensation authority has become a bit more workable. Still, there are 281.000 people in the queue currently, in a population of 5m in a country with substantially higher GDP per capita than the US. Blown up to be US comparable it would be a minimum of 13m people waiting, not unlikely many more. Not exactly a panacea as you may just feel forced to spend the equivalent amount of money to pay your way out of the queue. 


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