15% Tax

There are mountains of research comparing US healthcare cost-effectiveness with that of other countries, done by everyone from the OECD to McKinsey. The broad consensus is that, over all, the US system is far less cost effective than that of most Western countries, Japan, and a number of others. I recall that Berkshire, Amazon, and JPMorgan banded together to tackle this behemoth problem … and soon thereafter gave up.

The big cost drivers in the US system include high admin costs (paperwork, admin staffing), a large for-profit element that’s driven by billing for volume of procedures rather than for outcomes, and high pharma costs (incl. outsized advertising expense). The system also devotes an inordinately large fraction of total spend on expensive procedures on elderly patients that add little if anything to their quality of life (as noted in a prior post). The situation is hardly helped by the fact that the US has among the highest number of hospitalizations from preventable causes and the highest rate of avoidable deaths (esp. firearms).

The US “system” is in reality 3 systems cobbled together and largely an accident of history (as noted previously). For folks with great insurance and drug coverage (like me), it’s arguably the best system in the world, esp. if one requires state of the art care. For most of the year, I live walking distance from a world-class university medical center from which I receive excellent care (including twice for life-threatening medical issues) at very little cost (to me).

For most folks post-Obamacare, the US system offers decent health care but at an unnecessarily high price. Other systems worldwide provide better care at less cost: they eliminate much of the overhead, most or all of the profit skim, and keep costs within an overall annual budget.

As for the under-insured and uninsured in the US (about 1/8 of the population), they get little regular preventive care and show up in the ER when they’re very sick or badly injured. They’ll have bills trailing them for many years, much of which they’ll never pay off.

A good overview is: https://www.commonwealthfund.org/publications/issue-briefs/2…

Somewhat dated, but still useful: https://www.mckinsey.com/~/media/mckinsey/dotcom/client_serv…

Tons of data and reports here: https://www.oecd.org/health/health-care-quality-outcomes-ind…

23 Likes

The US “system” is in reality 3 systems cobbled together…
… folks with great insurance and drug coverage…
…most folks post-Obamacare, the US system offers decent health care but at an unnecessarily high price…
…the under-insured and uninsured…

Another interesting way to look at is it the duality of private sector and public sector payers.
It’s easy to think of the US as a private payer system, but the various Medicare, VA, etc programs are themselves huge.
IIRC, the US public sector healthcare spending per capita alone exceeds the Canadian total spend per capita.
Then there is the whole US private payer system on top.

It’s a very big business overall.
As an investor, I’m a fan. And as I’m not a US taxpayer or purchaser of health insurance, no biggie for me.
Maybe not true: I think my private insurance includes an expensive extra rider to allow treatment in the US if it comes up.
I almost never go to the US, so I just think of it as the “fly to the Mayo if needed” fee.

Jim

3 Likes

Three, the care given is pretty much the same around the world (at least around the industrialized, Western world). It is true that maternal mortality rate is a function of healthcare access. So our very high maternal mortality reflects something that is fundamental broken about healthcare access.

Yes, this is essentially my point. Maternal mortality rates say very little about the quality of health care, but they say a lot about access to health care. The proper counterargument to my point is not that US healthcare is of poor quality, it is that the total US population (including illegal immigrants) has poor access to the excellent health care that most Americans enjoy. (Whether this is cost-effective health care is another question. Obviously, there are diminishing returns to investments in health care, with exagerated end-of-life care a prominent example. It may be that wealthy countries like the USA choose to spend more wealth on health care, once they have looked after their other material needs, and this may not be such a crazy thing to do.)

If you are worried about access to good meals, the fact that you have restaurants that have earned a lot of stars doesn’t touch the question of whether people have adequate access to high-quality food. I don’t think there can be any serious debate about the excellent level of health care in the USA for people that have adequate coverage. I believe the problem is with the 10-20% of the population that has inadequate coverage, along with the serious epidemic of obesity that is clearly much worse in the USA than in other developed countries.

To illustrate how serious the obesity problem is, I calculated the average weight of (US) Americans, Canadians, French and Swedes last year, wondering whether the high covid mortality in the USA (pre-vaccination) might be partly a result of obesity. I don’t have all the references at my fingertips, but my results gave Americans as by far the heaviest (adjusted for slightly different heights from country to country), with Canadians about 10 pounds lighter, Swedes about 18 pounds lighter, and the French about 20 pounds lighter - this is the AVERAGE. Imagine what 20 extra pounds does to maternal mortality rates! Maternal mortality rates in the USA increased by more than 100% between 2001 and 2014 (https://bmcpublichealth.biomedcentral.com/articles/10.1186/s…), for instance, and I don’t think you could really make the case that this is because the quality of health care has gotten much worse.

dtb

3 Likes

I’ve never understood why the poorest in the US wait for the emergency room. They should be on Medicaid, which takes care of everything. I’ve known a handful of people on it, including myself for a few years when I was disabled, and there were no bills and even medications were a fraction of what they are for Medicare folks.

The people who really suffer in the US are those who are above the Medicaid income limits and who live in a state that does not offer expanded coverage for those somewhat over the limits. And those who make too much to receive subsidies towards their premiums. Drug coverage can be a real backbreaker for these people, should they require something beyond generics. Those affected include anyone who received a deserved raise only to find out it’s kicked them out of the subsidy range and now their family of four must pony up for full freight, which negates the raises.

Not great, Bob!

SD

1 Like

I’ve never understood why the poorest in the US wait for the emergency room. They should be on Medicaid, which takes care of everything.

Medicaid coverage varies from state to state. There are a lot of poor people out there who do not qualify, and nor do they make enough to qualify for subsidies under the Affordable Care Act.

It’s a shame the Dems didn’t muster the votes to fix that problem in some way this go around. The Affordable Care Act originally solved that problem by mandating expansion of Medicaid to cover everyone with income below where the ACA subsidies kick in, but the Supreme Court threw that out.

A ‘simple’ fix would be to make the ACA subsidies available with no minimum income qualifier, but the Feds don’t want to do that because Medicaid is so much cheaper to offer, both for the government and for the people getting healthcare.

If I had the choice, I think I’d rather be on Medicaid than my ACA high deductible Blue Cross Blue Shield plan, but I’m not 100% sure. I guess the cost savings would outweigh the loss of choice, but I’d have to think about it.

3 Likes

I’ve never understood why the poorest in the US wait for the emergency room. They should be on Medicaid, which takes care of everything.

Medicaid coverage varies from state to state. There are a lot of poor people out there who do not qualify, and nor do they make enough to qualify for subsidies under the Affordable Care Act.

I knew two people who you might think qualified for Medicaid, but are now both dead (and they were under 30 years old at the time). They were severely abused and their mother murdered when they were very young. They were “raised” by a schizophrenic grandmother until the local child-protective services removed them. The younger ones were put in foster homes and the oldest one in a mental hospital for a few years. They then aged out and were homeless.

There are programs for some homeless people, and what are what are known as “food stamps.” But to get food stamps, you have to have a place to live that has a refrigerator and a stove. And if you are homeless, you do not qualify. Sometimes they were in homeless shelters, but with their problems, they got drug problems and with that, they get kicked out of the homeless shelters. To get in to drug detox programs has a waiting list, and you cannot get into a drug rehab program (28 days) you must complete the detox program. And the rehab programs have even longer waiting lists. And they will not take you unless your Medicaid covers the entire 28 days, and in some states Medicaid only covers about two weeks. Meanwhile, you are homeless. If you are living on the street, in abandoned buildings, with a pimp, or anyplace you can find, your mental health and your physical health does not improve. When one of one of my friends was having severe pain problems, the Medicaid doctor would not prescribe pain medication until she got an x-ray, but she had to wait three weeks for an X-ray under Medicaid in her state. So she got pain med on the street and kicked out of the shelter for doing that.

One of them hanged herself and another died of a street drug. Medicaid does not take care of everything in the two states I am familiar with.

13 Likes

In NC, impoverished adults do not get Medicaid, no matter how poor you are, unless you have minor children, or are disabled.

Hows that for a nice incentive to have kids in a bad situation?

NC has been turning down the opportunity to expand Medicaid with the Feds paying 95% of the incremental cost ever since Obamacare passed. It’s an ongoing tragedy for thousands of people in the state. It’s been hard on hospitals, forced to offer ‘free’ care in the emergency room for this population, with many rural ones closing in recent years, and other once good non-profit hospitals selling themselves out to large for-profit chains, as happened to my local hospital, with care abruptly getting much, much worse there.

NC legislators: not good at math. They’d rather ‘encourage’ the poor to pull themselves up by their own bootstraps than accept federal aid on their behalf. Kinda like cutting off one’s nose to spite your face, if you ask me.

16 Likes

I’ve never understood why the poorest in the US wait for the emergency room. They should be on Medicaid, which takes care of everything. I’ve known a handful of people on it, including myself for a few years when I was disabled, and there were no bills and even medications were a fraction of what they are for Medicare folks.

A big factor is being able to navigate the process to qualify for Medicaid in the first place. I have helped someone with multiple cognitive issues - OCD, depression, anxiety, all bundled up with a big helping of executive function disorder - qualify for Medicaid and some other benefits programs. It involves a lot of documentation and paperwork. I believe that without my help, and that of their sibling, they would never have been able to navigate the system to receive medical coverage or housing assistance - and probably would have died on the streets years ago in misery and terror. Multiply that by millions of mentally ill people in the US who don’t have that much help, and I started to get a handle on what homeless people live (and die) with.

24 Likes

I currently live in Texas, the poster-child for poor leadership on medical care for the poor. Current leadership under Gov Abbott has forfeited an estimate 100 BILLION in federal funds, mostly because they didn’t like Obama. Texas consistently ranks as one of the worst states for having the most uninsured, and we also rank deal last in the availability of prenatal care.

https://www.statesman.com/story/news/politics/politifact/202…

https://www.texmed.org/Template.aspx?id=59688

20 Likes

oddhack: I believe that without my help, and that of their sibling, they would never have been able to navigate the system to receive medical coverage or housing assistance - and probably would have died on the streets years ago in misery and terror. Multiply that by millions of mentally ill people in the US who don’t have that much help, and I started to get a handle on what homeless people live (and die) with.

Kudos to you, oddhack.
I’ve observed the same, in a person with a similar “ecosystem” of challenges.

:+1:
ralph

8 Likes

I’ve never understood why the poorest in the US wait for the emergency room. They should be on Medicaid, which takes care of everything.

Medicaid absolutely does not “take care of everything”. Dental coverage is crap, for example - one cleaning visit/year, good luck finding an office which takes it, and there’s a pretty good chance of the dentist letting you know how much contempt they feel for people on Medicaid, to boot, based on my friend’s experience. As for mental health coverage, almost nothing. You can get some group therapy and medications. If you go to Kaiser Permanente, for example, you’ll quickly find there are no therapists available - they outsource virtually all of it, the wait time for a single appointment is many months, and therapists qualified to deal with complex suites of problems are off in private practice making $300/hour.

So when you see that scary, toothless guy on the street yelling and mumbling to himself - maybe he’s just consistently made a lot of really poor choices that brought him to that point. But more likely he’s seriously ill and has found that there is literally no meaningful help available to him.

24 Likes

Yes, this is essentially my point

Good. Yet you decide to keep arguing.

I don’t have all the references at my fingertips, but my results gave Americans as by far the heaviest (adjusted for slightly different heights from country to country), with Canadians about 10 pounds lighter, Swedes about 18 pounds lighter, and the French about 20 pounds lighter - this is the AVERAGE. Imagine what 20 extra pounds does to maternal mortality rates

How strange. You said maternal morality rates cannot be compared across countries because of illegal immigrants. But illegal immigrants are no longer an issue for comparing obesity rates across countries. I guess illegal immigrants are only an issue for data points that contradict you.

Let’s try to get to the point: Do you believe healthcare acceess is in crisis? A yes or no will do.

Re: Affordable Care Act subsidies:

It is a sliding scale. All the way from 1X to 4X. But you are correct at 4X it cuts you off. Which I believe is over $90K of income.

Depends on household size. Good estimator here:

https://www.kff.org/interactive/subsidy-calculator/

Families/individuals are eligible for a subsidy if their modified adjusted gross income (MAGI) is less than 400% of the federal poverty level. MAGI for most people is their AGI.

In 2020 for our family of 5, if we had an AGI of $120,680 we got a PTC of $9,228. If we made $120,685 we got a PTC of $0. That’s the subsidy cliff.

1 Like

How strange. You said maternal morality rates cannot be compared across countries because of illegal immigrants. But illegal immigrants are no longer an issue for comparing obesity rates across countries. I guess illegal immigrants are only an issue for data points that contradict you.

I’m not really seeing the strangeness, and I have no idea whether illegal immigrant mothers are more or less obese than other mothers. My point is that looking at maternal mortality as an indicator of health care quality is not very informative if you don’t also consider important contributors to maternal mortality like obesity and illegal immigrants with no access to health care, two factors that are significantly different in the USA from most other countries with which the American healthcare system are often compared.

Let’s try to get to the point: Do you believe healthcare acceess is in crisis? A yes or no will do.

I think there is a major problem with healthcare access in the USA, so I guess that’s a yes. Except that to say that it is a crisis is to suggest that this access is worse now than it has been in the recent past. I would just say that healthcare access is a critical issue, for a small but important percentage of USA residents. But the quality of healthcare is not the major problem.

dtb

1 Like

A big factor is being able to navigate the process to qualify for Medicaid in the first place.
My sister and I have experienced this in spades with our parents. Neither could walk, it was costing about $15000/month just for room board and the assistance they needed every day. In a few years they ran out of money, but still had pension and social security of about $7,000/month coming in.

Obviously $7000/month is not poverty, but obviously it can’t pay their medical expenses either. Medicaid (in California at least) will cover them. But it took months, a $3800 consultant (who did amazing amounts of work, and about 200 hours of my sisters and my time finding financial information, moving finances around (the owner, not the beneficiary or insured, had to be changed on the life insurance they owned for one tiny example) and all that of course documented and spun by the consultant. Of course that $3800 is well spent and recovered in a month once they are on medicaid, but do you think even a lower middle class person, or someone who did not have access to my amasing sister is ever making it through that hoop?

My guess is that if you at least make it into assisted living when you have money that social workers will pick up the pieces when you really fall apart, and get you on medicaid in a shared room skilled nursing facility if you don’t have someone like my sister. But my mom is living in an assisted living at likely somewhat lower cost to medicaid than if they stored her away in a skilled nursing home.

I don’t know what the best solutions are, but medicaid for us is a program for the upper middle class.

R:

4 Likes

I don’t know what the best solutions are, but medicaid for us is a program for the upper middle class.

Make everyone automatically qualified for Medicaid, and then tax those who received it and have higher income in their tax return.