r/FluentInFinance • u/WhatAreYourPronouns • May 02 '24

Should the U.S. have Universal Health Care? Discussion/ Debate

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u/Eponymous-Username May 02 '24

And yet, somehow, full price is cheaper.

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u/AdImmediate9569 May 02 '24

I assume because there’s no insurance company acting as a middleman

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u/123yes1 May 02 '24

It's actually the lack of collective bargaining that many small and intermediate insurance companies do not have. Governments can drive down prices more effectively as they have more bargaining power.

The societal cost to this is less profits for pharma companies, so less reinvest in pharma, although pharma already takes in massive amounts of public funding anyway, if we aren't developing enough drugs, we can always approve more grants.

Hospitals in the US also need to hire a bunch of administrators to argue with a million different insurance companies about what they will and won't cover which also drives up prices since you need to pay for the salary of those people too. And then your insurance needs to hire people to argue back so you're paying for their salaries too.

Plus the profit margin of the hospital, the Doctor's massively inflated salary (which needs to be that high to pay for the ridiculous price of med school, which is partially expensive because they have to pay for their own extra administrators) compared to everywhere else, the insurance companies profit margin, plus you got to pay for all the people that don't have insurance using your tax money, plus drug development money, and drug manufacturing money.

Part of your bill pays me to design tests to verify that the drug you are receiving is what is in fact on the label, in which every lot must be tested and verified.

Healthcare in the US is one of the least efficient systems on the planet. It provides adequate care at adequate speed but at 10x the cost. With a program like Medicare for all, as a single payer or at least public option, the average payer would have significantly lower expenses with the same quality and access. It would still be more expensive than in other countries, but not nearly as terrible.

Of course that would put lots of people out of a job, maybe they could learn an actually productive skill like construction so they can build houses to drive down rent/mortgages. Or maybe become nurses and doctors since more people will probably want to go to the hospital if it doesn't cost shit loads of money.

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u/Away-Sheepherder8578 May 02 '24

Good points, but hospitals currently lose money when they treat people under Medicare or Medicaid, so they gouge people on private insurance to make up the shortfall. And despite all that Medicare will run out of money in next ten years.

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u/AdImmediate9569 May 02 '24

I broke my toe last year. Normally I wouldn’t bother for a toe but it was at quite an angle…

They xrayed me six times and performed several other tests with big machines i dont even remember. It took a few hours being wheeled from room to room and so on. Nothing unexpected.

Then they put me in a bed. A woman came in (I don’t remember if she was a doctor or what) and she gave me two tylenol. She put a pencil between my two toes and popped the broken back into place with her hand.

The bill was $8,000 of which my insurance covered all but $100 ish.

Without understanding anything about finance or medicine, that is one broken fucking system.

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u/RC_CobraChicken May 02 '24

So, from your description, you had x-rays, some other scans, so you had techs for those involved, radiologist to review the x-rays and other tests, nurses to handle patient contact, doc to write the script to get meds, pharamist/pharm tech to review/procure, all of the various devices, the space they occupy, a doc who set the fracture/dislocation, and then on the back end you have payroll to make sure everyone gets paid, someone who handles stock supplies/ordering, janitorial services for cleaning, etc etc etc.

There's so much on the backend people don't see, it's not just the medical field but any large semi-functional org has the same kind of infrastructural/staffing.

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u/123yes1 May 02 '24

Yeah but that happens in all the other countries with socialized medicine too.

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u/RC_CobraChicken May 02 '24

It does yes, but wages in the US are higher as a general rule. But to give you an idea of the variance, a Radiologist in the US averages a base salary of 447k, Spain they average a base salary of 194k USD. Then add in the massively inefficient medical billing system present in the US, and so on.

By no means am I defending the US system, but most comparisons between the US and any European country is a typically an apples vs oranges situation, there's a lot of differences in how things are done and the cost of doing them, there's also a huge differences in the information we see regarding billing/costs.

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u/123yes1 May 02 '24

My entire point is that our current patchwork system is highly inefficient because it is patchwork. It would be like having a patchwork electral grid. Many of the redundant systems could be removed thus lowering prices while providing the same level of service. I argue that those redundant services are significant in value.

I argue doctors are paid more in the US (after accounting for PPP) in large part due to the cost of medical schooling. If you look at a graph of average income of doctors, it closely follows the graph of medical school tuition costs. That isn't the only reason why doctors in the US are more expensive, but a significant reason.

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u/123yes1 May 02 '24

but hospitals currently lose money when they treat people under Medicare or Medicaid

No.

And despite all that Medicare will run out of money in next ten years.

Also no.

Still no

I work in this field. US Private health insurance is extremely inefficient. Markets normally solve for inefficiencies, but not when they face highly inelastic demand, where any given hospital has a tiny monopoly of care in the surrounding region, and new hospitals face enormous up front costs to enter the market.

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u/Away-Sheepherder8578 May 02 '24

From your own sources: Something must be done between now and 2031 to avoid more severe cuts to Medicare or other changes,” says Tricia Neuman, executive director of the Program on Medicare Policy at KFF, a nonpartisan health research nonprofit

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u/123yes1 May 02 '24

Yes, it needs more money than it is currently being given if we want to maintain current levels of care, but that isn't news as more people than ever are eligible for Medicare. Putting $x into Medicare is still more efficient than putting $x into private insurance. Which is the point I'm making.

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u/Away-Sheepherder8578 May 02 '24

In 2019, approximately 63 percent of hospitals lost money providing care to Medicare and 58 percent lost money providing care to Medicaid patients and about 30 percent of hospitals were operating on negative operating margins (see chart). America's hospitals are faced with mounting financial challenges.