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PaperclipPerfector  20d ago (text post)   30956 thread views

Culture War Roundup for the week of December 2, 2024

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Your anger at health insurance companies is misplaced.

The insurance companies, the AMA, and the feds are locked together in a perverse cycle that produces a system that somehow spends even more on healthcare than socialized medicine countries...but the lion's share of the extra money goes to doctor's salaries (artificial scarcity driven by the AMA, med schools, and residency limitations) and ever-increasing administrative costs (additional regulations and insurance bureaucracy).

but the lion's share of the extra money goes to doctor's salaries

Doctor's salaries are not a significant percentage of healthcare spending. What percent of spending would be required for you to consider "lion's share" to be an accurate description?

I said the lion's share goes to higher salaries and higher admin costs. The abstract of the study I linked in my comment:

The United States far outspends Canada on health care, but the sources of additional spending are unclear. We evaluated the importance of incomes, administration, and medical interventions in this difference. Pooling various sources, we calculated medical personnel incomes, administrative expenses, and procedure volume and intensity for the United States and Canada. We found that Canada spent $1,589 per capita less on physicians and hospitals in 2002. Administration accounted for the largest share of this difference (39%), followed by incomes (31%), and more intensive provision of medical services (14%). Whether this additional spending is wasteful or warranted is unknown.

31% + 39% = 70% - over two thirds of the U.S.'s increased per capita physician and hospital spend over Canada's is down to those two things. That's "the lion's share" by any measure.

Current physician salaries are 8.6% of healthcare costs per Stanford. Looking closer at your data, it seems to be very old - it's missing 15+ years of physician salary pay cuts (which have been going on yearly for decades) and 15+ years of increased administrative bloat and other factors (such as increased excess services).

If you cut physician salaries in half across the board (which simply isn't possible, if you did that some specialties would be making less than nurses, and specialties like OB with an immense malpractice burden would be financially impossible), then you would barely make a dent in total expenditures and introduce significant new problems - who is going to work weekends and holidays and nights after such a massive pay cut?

Increased administrative costs are unnecessary, expensive, and much easier to reduce.

The ACA was designed to make private health insurance so onerous a hassle and so hideous an expense that the public would overwhelmingly approve Hillary’s single-payer she’d been working on since the 90’s.

Then Trump won, tried to kill the ACA, and was stopped by McCain’s spiteful deathbed vote. So it endures.

So break the doctors' cartel. What do insurance companies have to do with this?

The ACA mandates that insurers have to spend at least 80% or 85% (based on size of market) of premiums on actual provision of healthcare.

Cost cutting is of little use to them. If they take in $100M, currently spend $85M on medical, but are able to cut medical costs by 30% to about $60M, then they'd also have to cut that $15M allocated to other stuff down to about $10.5M. And give up about $30M in premiums.

With this regulation becoming more efficient hurts your bottom line.

But if they can grow the amount spent total, then the 15% or 20% they're allowed to use on other things also grows.

It's basically cost plus contracting, which is apparently popular when you're spending other people's money.

Story in healthcare same as everywhere - you have an increasingly rich populace with a rivalrous good that is non-discretionary (housing, education, childcare, healthcare), and the Government/private actor response is to subsidize demand and regulate supply than go shocked-pikachu-face.jpg when costs skyrocket.

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