It's a truism that America's system was never designed -- it's a patchwork of different pieces that each pay for some people in some situations.
But I've been reading about our system, since I fell down a rabbit hole a couple years ago. Things are bad, yes, but there are actually interesting ideas out there, and real efforts at reform that are being tried.
For example, did you know Maryland has a different way of funding hospitals than most other states? [0] And that other states are interested in copying it?
A system built as a mish-mash patchwork is likely to be solved by a similar "ground-up" framework.
Each state should be free to experiment (as Maryland has done here) and the federal levels should be restricted to providing funding and basic guidelines that have to be met.
Part of the problem is that as you begin to delve in and see where the outflows are, you start to realize that fixing the fundamental problem involves making the people healthier in general, which will rumble the very foundations of Wall Street.
One of the great powers of federalism is not having to duplicate efforts for every state. It also reduces cost by allowing 'one-size-fits-all' and economies of scale, rather than each state having its own bespoke whatever.
Many countries around the world enjoy the benefits of coordinated public health departments. Part of the United States' poor response to COVID was because there was no central public health department that could work closely with state agencies to e.g. provide data about what's going on, share best clinical practices, etc. Each state is an island.
So no, I don't agree that the only goal of the federal government should be piggy bank. States should have a lot of latitude with their policies, but generally standardizing things across the nation would be a net positive.
Many countries around the world are the size of US States. The UK and Germany are only twice the size of California, for example.
The problem in the US isn't that we can't do things, it's that nobody can agree on what to do. And to solve that problem, let states do their own thing as much as we can, and it'll become obvious where the good systems are.
Or in other words, an argument needs to be made why the EU "works" with individual "states" doing their own thing, but the US cannot "work" unless it's considered as one large country.
> analogy is quite misleading, because, in addition to California, there is also Wyoming, with a population of less than <600k
Wyoming has the population of Malta [1][2] but the GDP/capita of the United States and Norway [3][4]. It should be expected we'd have a different optimal solution from California.
Sure, but fighting the impulse to solve problems at the Federal level that could/should be solved at the State level doesn’t preclude individual states from building multi-state solutions together.
Scalia was right in saying that the checks and balances slowing things down is a feature, not a bug. The Framers were right about protections against faction. I’m not sure they understood how badly malicious schemers could deliberately manipulate the system. Things just aren’t getting done, and it is killing people.
Half of the problem with American politics these days is people from blue and red states trying to force the entire country to become one giant blue state or one giant red state.
It's too big for one-size-fits-all answers. Every state should be able to largely do its own thing as long as it isn't violating the Bill of Rights.
If you look at some of the more controversial bills being passed in the states, they're also being more or less lifted out of national political action committees and think tanks. Extreme in-state gerrymandering (supported by national party organizations) has effectively nationalized big parts of state politics in those states.
I've spent the majority of my adult life in Washington State and I've witnessed this firsthand. This place used to have a unique vibe that was more purplish-blue "granola hippies with guns that just want to be left alone." Progressivism mixed with an Old West libertarian streak. There was a GOP minority, and the red east and blue west played off against each other and kept things reasonably center-left.
Now it's a one-party state, and the legislature might as well be the state Parliament, taking its marching orders straight from the DNC. The Governor is just as all-in on drinking the blue Kool-aid, and the state Supreme Court seems like it only exists to validate what the other two branches decide. And looking at places like Texas and Florida, seems like the same is happening on the other side of the aisle.
What's infuriating is there are conservatives in blue states and liberals in red states getting just steamrolled to the point of "why should I even vote or participate, when I'm just going to get told to sit down and shut up?" That's not healthy for democracy. The rights of the minority exist for a reason and you can't just vote things away because you have 50.01 percent of the vote.
Yeah, it seems very unfair. If Party A has 60% of the seats in the state legislature, and Party B has 40%, then intuitively it feels like Party A should get 60% of what it wants. But as you said, Party A actually gets more like 100% of what it wants.
This is a thing where having more parties would really help. If there were (say) 4 parties, each with ~25% of the seats, then they would have to bargain with each other and form coalitions, which I think would be a really healthy process for democracy.
> generally standardizing things across the nation would be a net positive.
The person you replied to said
> federal... should be restricted to providing...basic guidelines that have to be met
You may be closer in opinion than you realize.
Btw what the person you responded to described is how the Canadian healthcare system - which many liberal-type Americans on Reddit appear to admire - works. The federal government sets standards and provides some funding. The provinces implement it their own way.
Exactly - the key is to have very high-level and outcome-driven guidelines and not trying to micromanage everything; that allows various methods to be tried, and the best ones will start to be emulated.
(Another underlying reality is that the vast majority of people will say education and healthcare are "very important" but very few people will move to improve either of those - beyond going out of state for college.)
> very few people will move to improve [education]
This is empirically false. People move to better school districts or enroll their children in private schools all the time. It doesn't require moving to a different state.
There's a massively underused middle ground -- instead of 1 or 50 different systems we could have a small N. One example would be emissions standards, where N is basically 2 -- the federal standard and the California standard, with some states choosing to use the California standard instead of the federal standard. This happens because that's their only 2 choices because of weird historical events, but imagine it happening by deliberate choice where the other states co-operate more with California in setting the more restrictive standard. States should be co-operating more often.
I really like this idea. And it lets ideas grow more organically: instead of a promising pilot program in (say) Maryland which then tries to go national, there can be a club which grows gradually. Another state joins the club in 2026, then another two in 2027, then...
>One of the great powers of federalism is not having to duplicate efforts for every state. It also reduces cost by allowing 'one-size-fits-all' and economies of scale, rather than each state having its own bespoke whatever.
One of the great failings caused by federalism and those who simp for it is that when a bad solution is arrived upon or a solution becomes outdated immeasurable suffering is caused and prolonged by not letting those states who want to try and improve do so.
There were a dozen states who were on the precipice of having this solved before the feds stuck their dick in it. Remember Romneycare?
There are already numerous and simple policy levers that actually affect costs and cannot be gamed. Such as the age you become eligible for Medicare. You don't have to reach for anything innovative like global hospital budgets. I'm skeptical of your category of reforms - you really mean, "benign-looking administrative decisions," because if you're not making any hard choices, you're not making reforms. I would hardly call it "real efforts."
Amazing, every single dollar goes to care! Not a single dollar to overhead! Where are these insurance companies' profit margins coming from? How do they even pay their executives' salaries? Boy have I been mistaken about how inefficient the American system is
> How do they even pay their executives' salaries?
I suspect less goes to executives than you think. Most of it is going to pay employees in the insurance industry.
The irony is that they are being paid to say "no." Perhaps if they instead went to work as service providers, we could get more services for what we spend.
Healthcare executive pay is pretty darn high, more money than any family needs to live comfortably.
Keep in mind this is just for Blue Shield California. There are executives of other health insurance systems in other states and regions who are making similar compensation.
However, I'll go ahead and say right now that I support the idea of these executives being paid these salaries, but on one condition: that we first achieve the goal of 100% of Americans having affordable access to healthcare. Once that goal is achieved, then we can start paying executives big bonuses and incentives. Deal? (Yeah, right...)
Below is a summary of the compensation paid in 2024 to Blue Shield of California’s President and Chief Executive Officer (CEO), Chief Financial Officer (CFO), and top three highest paid executives (other than the CEO and CFO) who were employed by Blue Shield of California at year-end.
Epic Systems is a private company, so there's no executive pay information, but the founder Judy Falkner's estimated net worth is $7.8 billion. Perhaps Epic could reduce the price of its very expensive software for providers to help ease healthcare costs and maybe Judy could give up some of those billions and not notice any difference in her quality of life?
BCBS CA revenue is approximately $25B. The total of above is $25.6M. That's 0.1%.
You may view those salaries as appropriate for leading companies of this size or immoral and outrageous. But either way executive comp is not the big problem with US healthcare costs.
$14,570 per person is our healthcare cost per capita.
For one thing, cutting out even that tiny 0.1%, that's a savings of $15 a year if I wasn't paying my insurance company's CEO. I would absolutely love to keep that $15. The idea that more than one dollar every single month from every single person is going to the CEOs of all our healthcare services is actually INSANE when you think about it.
That really means that out of my $14,570 yearly healthcare cost I could be paying something like $5/month just on executive salary. Who knows, maybe it's even more!
This is, again, insane. Why do Cleveland Clinic executives need to be paid $30 million/year?
This isn't administrative cost, like all the hard-working people who do the clerical work that keeps these systems operating. This is just the salaries of an extremely small group of people, less than 10 people per company.
All of these entities are allowed to make excess profit and/or have loose definitions of non-profit status, and pay CEOs dozens to hundreds of times the salary of their lowest paid employees. There isn't really a limit to the amount they can compensate top executives.
Blue Shield of California has 4.5 million plan members, so all of these executive salaries combined add up to 49 cents per member per month. It's not a significant factor in premium costs.
Sweet. Let's charge 49 cents per million dollars of unrealized capital gains per month, it's not significant and less of a burden than 49 cents per month for healthcare.
I think that's highly significant. Keep in mind that that's only one provider in the system. You've also got to pay the executive salaries of your hospital system, your pharmacy chain, your drug company, medical equipment company, etc.
If we figure that every company involved in your $15k/year healthcare cost is paying 0.1-0.5% of their revenue to executive compensation (Cleveland Clinic as a random example pays 0.4% of revenue to the executives, $30 million) then we are talking about a small streaming video subscription worth of cost just which is allocated not on paying a productive group of administrators to keep the lights on, but instead paying excess incentives to an extremely small group of people.
In reality, if CEO compensation was capped to something reasonable like $500,000/year or 10x the pay of the lowest paid employee, there would still be CEOs and the quality of CEOs would not decline because it would still be the highest paid job on the market. Everyone involved in our economy would be just that much richer if the wealth wasn't getting unnecessarily concentrated.
$500,000 is a lot of money, I don't want to minimize that, but it would not be the highest paid job on the market. There's a number of roles in medicine, law, finance, and nowadays software that pay more for fewer managerial duties. There really isn't much room to argue for cutting executive pay without arguing that it's unimportant to get the best people in executive roles.
And that's an argument you can certainly have, but it seems strange to make it a precondition to fixing the healthcare system, when cutting executive pay would resolve only a small fraction of the problem.
I think this summary is reductive, because it ignores the surprisingly dense layers of middle management in hospitals and clinics that are paid more than the medical professionals (and even that ignores external middle managers like PBMs etc).
That's pretty pathetic pay when we have run of the mill employees(ie non-founders) like Sundar and Satya becoming billionaires from their pay packages.
> Where are these insurance companies' profit margins coming from?
Vertical integration.
UnitedHealthcare's (Larger insurance company in the US) profits are effectively limited by the Medical Loss Ratio rules from the Affordable Care Act.
But they are owned by UnitedHealth Group, which also owns OptumHealth (the largest network of physicians in the US), OptumRx (pharmacies), and OptumInsight (technology consulting, which goes into the COGS for UnitedHealthcare). This is where they make their profits.
UHG controls which physicians + pharmacies are in their network and what their negotiated rates for many services are (the exception being medicare + medicaid).
> Amazing, every single dollar goes to care! Not a single dollar to overhead! Where are these insurance companies' profit margins coming from?
they kinda have it on chart but without overhead numbers: insurance collects 1T of payments, than for business segments, they pay around 60% of that as medical expenses, and for individual plans it is more like 40% of medical expenses, meaning for individual plans insurance corps have 60% profit margin.
> More than half of excess U.S. health spending was associated with factors likely reflected in higher prices, including more spending on: administrative costs of insurance (~15% of the excess), administrative costs borne by providers (~15%), prescription drugs (~10%), wages for physicians (~10%) and registered nurses (~5%), and medical machinery and equipment (less than 5%). Reductions in administrative burdens and drug costs could substantially reduce the difference between U.S. and peer nation health spending.
This chart breaks it down by spending, it does nothing about determining the effectiveness of said spending. How much actual care per $ spent?
I've been on a mock jury for a personal injury lawsuit--and it was obvious to a couple of us that the smoking gun presented by the defense clearly showed she was running up the bill on something minor. We were pointing out the problem--did that sway the majority? No. The general opinion seemed to be she was owed something for what had happened--and they had failed on the voir dire, they asked about my background, didn't ask anything about family. Oops--I knew it would end up all going to the lawyer and doctors, nothing to her (the proposed amount was less than the bills she had run up.) I played it fair and didn't speak up about what would happen.
And all the national systems have a fox guarding the henhouse problem. Provide proper treatment for the expensive stuff or lower the standards? So long as you make a sufficient portion of the electorate think you're doing a good job the reality is the standards get lowered. And cook the books in pretending it's fair. (Two examples that come to mind: Including "fairness" in the measure of health system quality--automatic selection for UHC, and comparing infant mortality (they admitted the comparison was not valid, did it anyway.) The reality is the biggest "cause" of infant mortality in the developed world is how the medical world falls on the stillbirth/infant mortality line. Even elsewhere--Cuba gets it's good infant mortality numbers by setting a minimum birth weight. The ones that were born too early and never had a chance get classed as stillbirths.)
I’m concerned with anyone proposing “Medicare for all” in America, because they all state - for doctors who want to stay out of the system, they can be paid directly… that immediately causes a slightly different 2 tier system. Right now our 2 tier system is the 90% with health insurance and the 10% without health insurance. In the new Medicare for all, it will be the 99.9% on government insurance, and the 0.1% - the ultra wealthy - who dominate tax policy and are heavily financially incentivized to reduce their tax contributions to the public system. They will influence politicians to spend less on healthcare, with no impact to their health outcomes. The only system which will work in the US is one in which the ultra wealthy have an incentive to provide funding to the public system, and that seems like you’d need to force them to be on the public system too.
> The only system which will work in the US is one in which the ultra wealthy have an incentive to provide funding to the public system, and that seems like you’d need to force them to be on the public system too.
In my state, I pay $15k/year in school taxes, yet I have no children. I pay $1000/year in property taxes to support my city's library, yet I don't have a library card. People are taxed for lots of things they don't actually benefit from. I don't think we would need to force rich people to use the plans. If they want to buy medical services from private doctors, sure we can let them.
The issue then becomes more about allocation of resources (how many doctors are available to be seen on the public system vs. only available to self-pay customers) rather than the issue being about how to collect taxes.
This may be small potatoes, but I've heard it said that people like you benefit "by not living in a state full of dumbasses." There's definitely an indirect benefit from these payments.
> (I personally don't mind subsidizing my library + local school district... good schools and libraries are good for the community)
Just sharing random coffee break thoughts... it always blows my mind is how many people _don't_ think like this. When base conditions improve for society, the conditions improve for _everyone_ regardless if they directly benefit you.
I'm also in the boat where I don't have kids, but I'd also like to live in a place that has educated people - so schools make perfect sense to me. Heck, even if I didn't benefit from it, providing children education is just the gosh-darn right thing to do.
IMO it's because there's both benefit and waste/corruption in these kinds of social benefit structures. some people choose to only see one or the other:
"these benefit everyone including those who don't use them directly! how could you be against it?"
"this money that I'm having to pay is either overpaid to corrupt vendors, or just straight wasted, why would we ever want to increase how much we're paying into this system?"
in reality you can't have one without the other. it's up to each person to decide whether they can take the bad with the good
It's just lack of trust. It's not that people want a worse community, it's that they have a hard time believing that taking extra money from their paycheck will create a better community.
Part of it is real; seeing massive amounts of state/local government waste and corruption makes it feel safer to keep your extra dollars instead of giving them away.
Part of it is difficulty evaluating timelines; more tax dollars for a better elementary school to be built in 3 years and to yield higher educated people 18 years from now it a lot to bet on.
Yes, universal health will start saving money even during the first transition year. We spend almost 1/3 or more of those total health dollars on billing administration. That amount surpasses the uninsured number. And the reality is if we can get medical care during the daytime, eventually emergency rooms might get less hectic. My hope is that more days than not ER personell have to pass the time like at a Firehouse.
That would require that the more tax money the school system gets the smarter the students will be. Every time I see a bill for increasing school taxes their justification is not for improving education quality, but for some other pet project they want to do.
You're never going to make a system that prevents the ultra-wealthy from augmenting it with private services. You might, however, reduce the power of the ultra-wealthy.
This is precisely what allows for the NHS to be cannibalized. They underfunded one of the best systems of healthcare and replaced it with private care for ultra wealthy while reducing quality of care for vast majority of people.
> is the 90% with health insurance and the 10% without health insurance
it's even more complicated, because you can have insurance fully accepted at one clinic and "not contracted" with a different clinic. it's a total mess.
Every western country that has a single payer system as far as I know allows for private clinics, doctors and labs.
I spent 18 years in Canada. The healthcare I got was as good as anything I received in America (in both cases it depends on where you live, unfortunately) and looking ahead to 2026 was cheaper (comparing my tax burden in Ontario to the terrible insurance I can afford for 2026 in America).
All the categories on the right side look perfectly reasonable. However what fraction of those big categories on the right, Hospitals and Physicians... that make up over half of the total, is siphoned off to pay for administratium or "shareholder value" and what fraction actually pays for medical care delivered?
If by shareholder value you include insurance companies etc not just the institutions themselves, it’s well over half.
Doctor time talking to an insurance company either directly or through paperwork is not actually providing any care during that time. Where things go vicious is because doctors are now so inefficient the time they are actually useful becomes increasingly valuable driving ever more paperwork to justify that time.
I'd really love to see the breakdown between how much we spend on physicians/doctors vs. caretakers (nurses, therapists, etc.) vs. how much on hospital admin and other stuff.
At least in UK's chart, "GP & Primary Care", "Private GP Services" and "Administration" are separated. Same in Germany too.
Yes, the diagrams are deeply flawed, in that they seem to suggest 100% of the money input to the system goes to hospitals, hospices, healthworkers, and so on.
I don't see a single outcome pointed at insurance companies... somehow.
> The outcome is $4.9T - which would make it the 3rd largest economy in the world, a high 8% admin costs - compared to the UK’s 2% admin, with medical bankruptcy still possible. We’ve never agreed on what we value. So we built a system that embodies our disagreement: employer-based coverage (market choice) plus Medicare (social insurance) plus Medicaid (safety net) plus exchanges (regulated markets).
> Decision #1: Workers pay at least twice
Here’s the first thing that jumps out: if you work a job in America (and you presumably do, to afford the internet where you’re reading this), you’re already paying for healthcare in multiple places on this chart:
Taxes: federal, state, and local taxes finance Medicare, Medicaid, and various public health programs in so many places. Our attempt at embedding it in single payer.
Payroll: if you’re employed, your employer pays taxes on Medicare (even though you presumably can’t use it until you retire at 65). This is a cost that doesn’t go to your salary.
Insurance premiums: get deducted from your paycheck to fund the employer group plans ($688B from employees alone).
> Could America make this choice? Technically, yes. Politically, we’d need to agree that healthcare is a right we owe each other, funded collectively through taxes. That would mean massive tax increases, eliminating private insurance as the primary system, and trusting a single federal agency.
The operational resistance alone would be too much: I’ve watched hospital execs squeeze out thinning margins and payer executives navigate quarterly earnings calls. We’re talking about unwinding a $1T+ private insurance industry, reconfiguring every hospital’s revenue model, and convincing Americans to trust the federal government with something they currently (sort of) get through their jobs. That ship didn’t just sail - it sank decades ago.
We've unwound industries before - if we have the political will we can do amazing things.
But the people in and using those industries have no desire to change so anything that does happen is likely to occur slowly from expansion - e.g, bringing Medicare to earlier and more people, and expand children coverage, etc.
I think there's some significant evidence that "users" of the private healthcare industry are actually quite unhappy about it. Due to some structural quirks of the US, it seems like it's less about how many people are happy or unhappy and more about how many dollars are spent in favor or opposition of a change.
Those are probably the easiest levels for simplification, but I'd expect significant pushback anyway. Something like start medicare at 55 would be a huge difference to most providers, just due to changes in reimbursement.
Taken together, as Andrew Tsang (too) beautifully depicts, the United States Healthcare system is arguably the largest bureaucracy on planet Earth. Larger in employees and collective spending than any effective bureaucracies in India or China.
Every time we (the US) try to fix / change anything, a bunch of wonks with irrational arguments whine and complain until they get their way. The initiative fails, and we don't fix / change anything.
In short, we value letting irrational sabotage any form policy making; because we don't exclude people who negotiate in bad faith.
Or people are acting in good faith (generally) but want to avoid being accountable for something deeply serious. You end up with a web that neatly prevents anyone really being held responsible for anything. In an industry that was supposed to be vocational and treat its duty as sacred.
Here's an idea. If other countries can provide healthcare for much less per patient, why can't they sell that to Americans?
In other words, allow US citizens to "opt out" of the US healthcare system and participate in the German one? You'd have to make some allowances for replacing taxes with costs, billing, and allow "German" healthcare to operate in the US ...
Basically every bit of the current system, from how much people are paid to how a hospital looks like, is a side effect of the way we pay for healthcare, and the way we decide which provider to select. So we cannot just wave a magic wand and get the German system, as a whole lot of capital decisions are now just straight out wrong.
We see similar things in education. People wonder how many European systems are cheaper than US universities: Well, it's very easy to see once you attend a university in Spain and then one in the US. The shape of the university, from facilities to salaries to class sizes, make them look like completely different organisms, even though 18 year olds come in from one side and come out with degrees in the other. And note that this is also connected to healthcare: How many doctors do we train, or bring in from other countries? How many years do they spend training, and how much debt do they incur getting training? How much are they going to ask in pay just to handle that debt?
Changing the US system is a very good idea, but the changes would be very traumatic to most people working for the system, or invested in the system. All of them would lobby against changes that make their lives worse, and therefore makes legislature that makes the change happen very difficult to pass.
Sure it’s fine. It’s also a significant pay cut for almost every American doctor.
Normal specialists in the US out-earn chief physicians in Germany by hundreds of thousands of dollars. All the fringe benefits in the world aren’t gonna buy you a new boat.
Are you comparing residents to specialists? They're not at all comparable. Residents in the US are typically within 3–7 years of graduating med school and are not able to practice independently. Specialists have typically finished 6–9 years of training after graduating medical school and are independent practitioners.
Healthcare insurance works when everyone including currently healthy people participate. What would happen is only Americans needing an expensive healthcare signing in.
The systems are so different there's no product to sell, it's a whole system of healthcare that permeates through society... You can't sell a national-level system of healthcare as a product, it's done through policy.
You can go one step further and make this a time-series. Costs skyrocketing. Quality of care actually going down across the country but especially in rural settings. Provider satisfaction plummeting. No one is happy…except greedy executives and shareholders.
> No one is happy…except greedy executives and shareholders.
It is a fairly effective system to extract money from customers (patients) while also ensuring that patients do not use too many services (afaik, US population has shorter life spans than rest of Western world).
One of the best explanations I have ever read about American Healthcare. Even after such good infographic it is still hard to comprehend such complexity.
> The $441B in prescription drugs - the story of incentivizing American innovation over price controls.
This itself speaks for how messedup the entire design is.
It actually doesn’t incentivize innovation. That’s the biggest scam in healthcare. If it actually led to innovations and notable uptick in quality, other countries would have done the same. The whole argument is so flawed it makes my brain hurt.
If we're gonna stick with private insurance in the US, we should detach it from employment. The current system has created a society of indentured servants, not for money, but for "health insurance". The current system is expensive for employers that are often mandated to provide health insurance plans. And it forces people to work for something they have little or no control over.
When you work for money, you can do whatever you want with the money once you've earned it. But being compensated with "health insurance", you've got almost no control over it; you get what the company gives you - and btw, you can't purchase the same thing on your own, with your own money (way too expensive for most middle-class folks).
Detach health insurance from employment. Open "health insurance plans" to the free market, just like auto insurance. Free employers from all the administrative overhead of managing health insurance for employees (the stock market will love it!) And let health insurance companies work for their actual customers (health care patients!)
Not all of it, but definitely the insurance part of it IMO.
It's hard to get an actual number, but many say nearly 1 million people work in health insurance in the US. And I'm not sure that even counts the people whose job it is to interface with them. That's a ton of jobs(and salaries) that likely wouldn't even exist in a sane system.
It is, but under "life, medical, and health" insurance, and only based on the employer not function. Any contractor like say, maintenance, janitorial, cafeteria, etc for the building would not be counted. People who work at hospitals doing nothing but insurance related work would also not be counted. That makes it hard to say definitively how many jobs would actually be affected, in my opinion.
The healthcare system in the US is, indeed, the best...if you're rich. If you're not rich, you're gonna spend a lot of time on the phone, arguing with bureaucrats and getting treated like shit.
A friend of mine is rich. We both have a health insurance plan from UnitedHealthcare. His experience is radically different from mine. He can make a phone call, and actually talk to his doctor within a few minutes. He can see his doctor the same day he asks to. He talks to one person who manages all the BS for him.
The problems and solutions are all well documented. Like the article mentions, there are many existence proofs of cheaper more effective systems. The real problem is the legalized bribery that prevents any action and the current media environment that pushes people to consume partisan rage slop so we don't hold mediocre politicians accountable.
I'd be more interested in how much of that $5 trillion finds its way to shareholders.
Most people generally don't have a problem with the idea of being charged a fee for a healthcare service. They have a problem with a system that grossly inflates that fee so that people who had nothing to do with the service get paid at the expense of people who are ill or injured. And of course, with the people in the system who are heavily incentivized to make sure that those dead-weight actors get as much money as possible.
There is a healthy concept of insurance where people pay to hedge against potential risk, and that's all fine and good. But one of the most insidious social diseases is mandatory insurance, or industries expecting individuals to insure themselves in any capacity whatsoever.
It is never ok for a business (or government) to offer a service that comes with risks, but then ask their customers/subjects to insure themselves for the risk to the business/government.
If I am charging people $100 for a service, then I ask them to insure themselves and everyone reliably insures themselves (the majority at least), they can still afford to pay my me $100, so why don't i just raise the cost to $100+$10000 where $10000 is the maximum the insurance will pay? You see the problem right, all the insurance achieved is the increase in prices, people still pay the same, you just now have a middle-man economy sucking up all the wealth/value people are generating.
If we could all agree on one thing, I wish it would be this. No more mandatory insurance in any context. Not fire, not flood, not health, not cars. Optional is fine, people who can afford it can hedge against the risk. But a bank shouldn't require fire insurance on mortgaged homes.
Businesses must eat the cost of doing business, in the end the price increase they impose will be less than the price increase of insurance mandates. That, or greed should be a felony (not happening).
For health insurance, it should be a simple subsidy for those who can't pay out of pocket. Some industries must be regulated, even in a capitalist free-market country. Health care, prisons, law enforcement, defense contractors, banks to name a few. Regulated as in centrally price-controlled.
For uninsured people that get sick, house burns down, car accident,etc... the government (for health care) or businesses convert the cost to debt. Same as when someone takes out a mortgage and refuses to pay at some point, or refuses to pay their car notes.
It's like we have had this 50+ year running experiment, it's failing really badly and everyone is coming up with ideas that don't involve scraping the experiment, just modifying it and waiting a bit longer to see if it works out.
> so why don't i just raise the cost to $100+$10000 where $10000 is the maximum the insurance will pay?
Theoretically because you are not the sole provider offering that service and the patient could go elsewhere, or in this case, the insurance company would require the patient to go elsewhere. Obviously, this sucks absolute donkey balls and health care will always involve a healthy dose of "I can't just shop around for where to get help for a heart attack".
In my naive opinion banning discriminatory pricing (no special negotiated insurance pricing), the sale of medical debt, and counting bill forgiveness as tax deductible charity would be a good start. With the absolute technical and capital-intensive marvel that is modern health care I just don't see anyone being able to reasonably get away with no insurance. Maybe there is a mandated co-insurance for all plans that could be covered by HSA accounts that everyone would get access to. That way there is a cost that is transparent to the patient that scales. At that point though I would just go to single payer.
(Rant incoming) Another thing that might need to happen is billing caps based off of certain outcomes. Especially in the emergency medicine realm. If you go to the emergency room and rack up a huge bill for something simple there should be a cap on the amount the hospital can actually recover. All I see is (rightfully) constant bitching and moaning from ER staff that people should be going to primary care or urgent care for issues which are less resource intensive and cheaper. The issue is the ER could provide those same services for just as cheap. Build out those same capabilities in or near the ER. The triage nurse can then send those low priority patients to the facility right down the hall. The issue is hospital admins have no incentive to do that, because as you said, why bill $200 when you can bill a minimum of $2,000 when you have your patient captive.
I also think it is silly we ask people to self-triage. It externalizes a lot of the costs to other parts of society. I can attest to this from the constant Volunteer Fire Department air-raid sirens I hear followed by a "EMS to Well Now Urgent Care for Patient in Distress". I'm sure the volleys love having their evening interrupted when it could have been a simple walk down an aisle.
Absolutely agree on the negotiated price bit. That is the root of an awful lot of evil.
I have no problem with the sale of medical debt--what's needed is sanity in the debt collection business. Combined with making one-party record the law of the land--you're automatically free to record telephone calls without notice.
Bill forgiveness as charity? No, that's counting twice. They didn't collect the debt in the first place, there is no profit to be taxed and thus you are deducting $0.
ER: Two problems here.
ERs are mandated to stabilize a patient, urgent cares are not. Thus you see people in ERs with situations that could be handled in an urgent care because the urgent care rejects them for unpaid bills. And the ER can't provide those services just as cheap--a big part of what you're paying for in the ER is potential even if it's not actually used. The freestanding radiologist books their machines as solid as can be done without too much friction. The ER needs the same machines but needs them available NOW. I've been in an urgent care over a kidney stone--they had a CAT manned and ready to go at 3am (the only urgent care in town even open at those hours even before you consider the machines--every ER needs those machines 24/7.) CATs don't cost much to run, the main cost is the machine and personnel time (operator and radiologist) and that's incurred whether it's doing anything useful or not. (And then the urgent care punted anyway. Yeah, you're right, stone, we can't deal with it, go over to the ER.)
I will also say that transport isn't always as simple as you make it out to be. Consider that stone I just mentioned--the ER was half a mile away, trivial under normal conditions. Even under those conditions I could have *slowly* walked it--except there was a major street in the way and I most definitely did not want to cross that. Is a taxi going to take the call? No. Call a friend/rideshare/ambulance.
so long as insurances are the "single payer" the problem will never go away. The single payer should either be individuals or the government (by mandate).
> For health insurance, it should be a simple subsidy for those who can't pay out of pocket. Some industries must be regulated, even in a capitalist free-market country. Health care, prisons, law enforcement, defense contractors, banks to name a few. Regulated as in centrally price-controlled.
Maybe not now, but 10-ish years ago that was the French system. Very poor people get outpatient care that is free at the point of service. Everyone else gets highly regulated private insurance with a strong market component. Emergent/inpatient care is provided by hospitals that aren't part of the insurance system.
There are definitely some trade-offs there, but I wouldn't be opposed to such a system in the US.
Assuming we take the statement "more free market equals more efficient outcome" as always and absolutely true, it raises the question: Are the healthcare-related needs of a society aligned with the most efficient outcome that a free market can deliver? I don't think they necessarily are.
It's a truism that America's system was never designed -- it's a patchwork of different pieces that each pay for some people in some situations.
But I've been reading about our system, since I fell down a rabbit hole a couple years ago. Things are bad, yes, but there are actually interesting ideas out there, and real efforts at reform that are being tried.
For example, did you know Maryland has a different way of funding hospitals than most other states? [0] And that other states are interested in copying it?
[0] https://www.vox.com/policy-and-politics/2020/1/22/21055118/m...
A system built as a mish-mash patchwork is likely to be solved by a similar "ground-up" framework.
Each state should be free to experiment (as Maryland has done here) and the federal levels should be restricted to providing funding and basic guidelines that have to be met.
Part of the problem is that as you begin to delve in and see where the outflows are, you start to realize that fixing the fundamental problem involves making the people healthier in general, which will rumble the very foundations of Wall Street.
One of the great powers of federalism is not having to duplicate efforts for every state. It also reduces cost by allowing 'one-size-fits-all' and economies of scale, rather than each state having its own bespoke whatever.
Many countries around the world enjoy the benefits of coordinated public health departments. Part of the United States' poor response to COVID was because there was no central public health department that could work closely with state agencies to e.g. provide data about what's going on, share best clinical practices, etc. Each state is an island.
So no, I don't agree that the only goal of the federal government should be piggy bank. States should have a lot of latitude with their policies, but generally standardizing things across the nation would be a net positive.
Many countries around the world are the size of US States. The UK and Germany are only twice the size of California, for example.
The problem in the US isn't that we can't do things, it's that nobody can agree on what to do. And to solve that problem, let states do their own thing as much as we can, and it'll become obvious where the good systems are.
Or in other words, an argument needs to be made why the EU "works" with individual "states" doing their own thing, but the US cannot "work" unless it's considered as one large country.
This analogy is quite misleading, because, in addition to California, there is also Wyoming, with a population of less than <600k.
> analogy is quite misleading, because, in addition to California, there is also Wyoming, with a population of less than <600k
Wyoming has the population of Malta [1][2] but the GDP/capita of the United States and Norway [3][4]. It should be expected we'd have a different optimal solution from California.
[1] https://en.wikipedia.org/wiki/Wyoming 588,000 in 2024
[2] https://www.worldometers.info/world-population/population-by... 545,000
[3] https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ... $90,000 in 2024
[4] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
Sure, but fighting the impulse to solve problems at the Federal level that could/should be solved at the State level doesn’t preclude individual states from building multi-state solutions together.
More of these exist than people realize - and are a great way to "latch on" to the success of another program.
Scalia was right in saying that the checks and balances slowing things down is a feature, not a bug. The Framers were right about protections against faction. I’m not sure they understood how badly malicious schemers could deliberately manipulate the system. Things just aren’t getting done, and it is killing people.
Half of the problem with American politics these days is people from blue and red states trying to force the entire country to become one giant blue state or one giant red state.
It's too big for one-size-fits-all answers. Every state should be able to largely do its own thing as long as it isn't violating the Bill of Rights.
If you look at some of the more controversial bills being passed in the states, they're also being more or less lifted out of national political action committees and think tanks. Extreme in-state gerrymandering (supported by national party organizations) has effectively nationalized big parts of state politics in those states.
I've spent the majority of my adult life in Washington State and I've witnessed this firsthand. This place used to have a unique vibe that was more purplish-blue "granola hippies with guns that just want to be left alone." Progressivism mixed with an Old West libertarian streak. There was a GOP minority, and the red east and blue west played off against each other and kept things reasonably center-left.
Now it's a one-party state, and the legislature might as well be the state Parliament, taking its marching orders straight from the DNC. The Governor is just as all-in on drinking the blue Kool-aid, and the state Supreme Court seems like it only exists to validate what the other two branches decide. And looking at places like Texas and Florida, seems like the same is happening on the other side of the aisle.
What's infuriating is there are conservatives in blue states and liberals in red states getting just steamrolled to the point of "why should I even vote or participate, when I'm just going to get told to sit down and shut up?" That's not healthy for democracy. The rights of the minority exist for a reason and you can't just vote things away because you have 50.01 percent of the vote.
Yeah, it seems very unfair. If Party A has 60% of the seats in the state legislature, and Party B has 40%, then intuitively it feels like Party A should get 60% of what it wants. But as you said, Party A actually gets more like 100% of what it wants.
This is a thing where having more parties would really help. If there were (say) 4 parties, each with ~25% of the seats, then they would have to bargain with each other and form coalitions, which I think would be a really healthy process for democracy.
You said
> generally standardizing things across the nation would be a net positive.
The person you replied to said
> federal... should be restricted to providing...basic guidelines that have to be met
You may be closer in opinion than you realize.
Btw what the person you responded to described is how the Canadian healthcare system - which many liberal-type Americans on Reddit appear to admire - works. The federal government sets standards and provides some funding. The provinces implement it their own way.
Exactly - the key is to have very high-level and outcome-driven guidelines and not trying to micromanage everything; that allows various methods to be tried, and the best ones will start to be emulated.
(Another underlying reality is that the vast majority of people will say education and healthcare are "very important" but very few people will move to improve either of those - beyond going out of state for college.)
> very few people will move to improve [education]
This is empirically false. People move to better school districts or enroll their children in private schools all the time. It doesn't require moving to a different state.
There's a massively underused middle ground -- instead of 1 or 50 different systems we could have a small N. One example would be emissions standards, where N is basically 2 -- the federal standard and the California standard, with some states choosing to use the California standard instead of the federal standard. This happens because that's their only 2 choices because of weird historical events, but imagine it happening by deliberate choice where the other states co-operate more with California in setting the more restrictive standard. States should be co-operating more often.
I really like this idea. And it lets ideas grow more organically: instead of a promising pilot program in (say) Maryland which then tries to go national, there can be a club which grows gradually. Another state joins the club in 2026, then another two in 2027, then...
> there was no central public health department
If only we had some sort of federal Center in charge of Disease Control... ;-)
But I agree with you that the CDC was weirdly passive during COVID. You'd think it would have been their moment to shine.
> rather than each state having its own bespoke whatever
that's states' rights and it's enshrined in the constitution
> the only goal of the federal government should be piggy bank
that is indeed the only goal that the founders had in mind, as it should be
"Many countries around the world enjoy the benefits of coordinated public health departments."
Many countries around the world are the size of a single state and lack the geographic diversity of the US.
>One of the great powers of federalism is not having to duplicate efforts for every state. It also reduces cost by allowing 'one-size-fits-all' and economies of scale, rather than each state having its own bespoke whatever.
One of the great failings caused by federalism and those who simp for it is that when a bad solution is arrived upon or a solution becomes outdated immeasurable suffering is caused and prolonged by not letting those states who want to try and improve do so.
There were a dozen states who were on the precipice of having this solved before the feds stuck their dick in it. Remember Romneycare?
Canada’s public healthcare system was started in Saskatchewan, one of the provinces, and rapidly copied to other provinces (and later to a federal level): https://www.cma.ca/healthcare-for-real/who-started-canadas-u...
If one state can manage to make it actually work, it might be enough.
There are already numerous and simple policy levers that actually affect costs and cannot be gamed. Such as the age you become eligible for Medicare. You don't have to reach for anything innovative like global hospital budgets. I'm skeptical of your category of reforms - you really mean, "benign-looking administrative decisions," because if you're not making any hard choices, you're not making reforms. I would hardly call it "real efforts."
Amazing, every single dollar goes to care! Not a single dollar to overhead! Where are these insurance companies' profit margins coming from? How do they even pay their executives' salaries? Boy have I been mistaken about how inefficient the American system is
> How do they even pay their executives' salaries?
I suspect less goes to executives than you think. Most of it is going to pay employees in the insurance industry.
The irony is that they are being paid to say "no." Perhaps if they instead went to work as service providers, we could get more services for what we spend.
Healthcare executive pay is pretty darn high, more money than any family needs to live comfortably.
Keep in mind this is just for Blue Shield California. There are executives of other health insurance systems in other states and regions who are making similar compensation.
However, I'll go ahead and say right now that I support the idea of these executives being paid these salaries, but on one condition: that we first achieve the goal of 100% of Americans having affordable access to healthcare. Once that goal is achieved, then we can start paying executives big bonuses and incentives. Deal? (Yeah, right...)
https://www.blueshieldca.com/content/dam/bsca/en/member/docs...
Below is a summary of the compensation paid in 2024 to Blue Shield of California’s President and Chief Executive Officer (CEO), Chief Financial Officer (CFO), and top three highest paid executives (other than the CEO and CFO) who were employed by Blue Shield of California at year-end.
Paul Markovich
President and Chief Executive Officer
$11,191,674
Sandra Clarke
EVP, Chief Operating Officer
$5,765,368
Peter Long
EVP, Strategy and Health Solutions
$4,360,245
Lisa Davis
EVP, Chief Information Officer
$2,873,613
Michael Stuart
EVP, Chief Financial Officer
$2,406,837
Some other CEOs:
Cerner (EMR provider to the VA), $35 million pay package: https://kffhealthnews.org/morning-breakout/cerner-to-pay-new...
Pfizer, $24.6M pay package: https://www.fiercepharma.com/pharma/rebound-year-pfizer-ceo-...
Epic Systems is a private company, so there's no executive pay information, but the founder Judy Falkner's estimated net worth is $7.8 billion. Perhaps Epic could reduce the price of its very expensive software for providers to help ease healthcare costs and maybe Judy could give up some of those billions and not notice any difference in her quality of life?
BCBS CA revenue is approximately $25B. The total of above is $25.6M. That's 0.1%.
You may view those salaries as appropriate for leading companies of this size or immoral and outrageous. But either way executive comp is not the big problem with US healthcare costs.
$14,570 per person is our healthcare cost per capita.
For one thing, cutting out even that tiny 0.1%, that's a savings of $15 a year if I wasn't paying my insurance company's CEO. I would absolutely love to keep that $15. The idea that more than one dollar every single month from every single person is going to the CEOs of all our healthcare services is actually INSANE when you think about it.
0.1% is actually a LOW amount for some entities in the system. For example, the Cleveland Clinic spends 0.4% of revenue on executive compensation: https://projects.propublica.org/nonprofits/organizations/340...
That really means that out of my $14,570 yearly healthcare cost I could be paying something like $5/month just on executive salary. Who knows, maybe it's even more!
This is, again, insane. Why do Cleveland Clinic executives need to be paid $30 million/year?
This isn't administrative cost, like all the hard-working people who do the clerical work that keeps these systems operating. This is just the salaries of an extremely small group of people, less than 10 people per company.
All of these entities are allowed to make excess profit and/or have loose definitions of non-profit status, and pay CEOs dozens to hundreds of times the salary of their lowest paid employees. There isn't really a limit to the amount they can compensate top executives.
> Why do Cleveland Clinic executives need to be paid $30 million/year?
So they can hire bodyguards?
There's no point using this issue to gossip about these people's salaries. Their salaries don't scale, and so don't matter. Scaling costs matter.
One thing to note: blue shield of California is a non-profit. So no money is going to shareholders.
Blue Shield of California has 4.5 million plan members, so all of these executive salaries combined add up to 49 cents per member per month. It's not a significant factor in premium costs.
Sweet. Let's charge 49 cents per million dollars of unrealized capital gains per month, it's not significant and less of a burden than 49 cents per month for healthcare.
[delayed]
I think that's highly significant. Keep in mind that that's only one provider in the system. You've also got to pay the executive salaries of your hospital system, your pharmacy chain, your drug company, medical equipment company, etc.
If we figure that every company involved in your $15k/year healthcare cost is paying 0.1-0.5% of their revenue to executive compensation (Cleveland Clinic as a random example pays 0.4% of revenue to the executives, $30 million) then we are talking about a small streaming video subscription worth of cost just which is allocated not on paying a productive group of administrators to keep the lights on, but instead paying excess incentives to an extremely small group of people.
In reality, if CEO compensation was capped to something reasonable like $500,000/year or 10x the pay of the lowest paid employee, there would still be CEOs and the quality of CEOs would not decline because it would still be the highest paid job on the market. Everyone involved in our economy would be just that much richer if the wealth wasn't getting unnecessarily concentrated.
$500,000 is a lot of money, I don't want to minimize that, but it would not be the highest paid job on the market. There's a number of roles in medicine, law, finance, and nowadays software that pay more for fewer managerial duties. There really isn't much room to argue for cutting executive pay without arguing that it's unimportant to get the best people in executive roles.
And that's an argument you can certainly have, but it seems strange to make it a precondition to fixing the healthcare system, when cutting executive pay would resolve only a small fraction of the problem.
I think this summary is reductive, because it ignores the surprisingly dense layers of middle management in hospitals and clinics that are paid more than the medical professionals (and even that ignores external middle managers like PBMs etc).
That's pretty pathetic pay when we have run of the mill employees(ie non-founders) like Sundar and Satya becoming billionaires from their pay packages.
Beat me to it. This chart is only 1/2 complete. It doesn't show where the money goes after hospital care, for instance.
> Where are these insurance companies' profit margins coming from?
Vertical integration.
UnitedHealthcare's (Larger insurance company in the US) profits are effectively limited by the Medical Loss Ratio rules from the Affordable Care Act.
But they are owned by UnitedHealth Group, which also owns OptumHealth (the largest network of physicians in the US), OptumRx (pharmacies), and OptumInsight (technology consulting, which goes into the COGS for UnitedHealthcare). This is where they make their profits.
UHG controls which physicians + pharmacies are in their network and what their negotiated rates for many services are (the exception being medicare + medicaid).
Here's a write up on their strategy: https://www.unionhealthcareinsight.com/post/unitedhealth-gro...
And an infographic that breaks it down: https://static.wixstatic.com/media/be1b8b_b0d4ebb04ce04b44a3...
> Amazing, every single dollar goes to care! Not a single dollar to overhead! Where are these insurance companies' profit margins coming from?
they kinda have it on chart but without overhead numbers: insurance collects 1T of payments, than for business segments, they pay around 60% of that as medical expenses, and for individual plans it is more like 40% of medical expenses, meaning for individual plans insurance corps have 60% profit margin.
[flagged]
https://www.commonwealthfund.org/publications/issue-briefs/2...
> More than half of excess U.S. health spending was associated with factors likely reflected in higher prices, including more spending on: administrative costs of insurance (~15% of the excess), administrative costs borne by providers (~15%), prescription drugs (~10%), wages for physicians (~10%) and registered nurses (~5%), and medical machinery and equipment (less than 5%). Reductions in administrative burdens and drug costs could substantially reduce the difference between U.S. and peer nation health spending.
Overhead which is associated with hospital spending, but not paid to the hospital, should not flow to the hospital in a Sankey diagram.
Physician salaries are only 8% of total healthcare spending. Care to revise your screed?
This chart breaks it down by spending, it does nothing about determining the effectiveness of said spending. How much actual care per $ spent?
I've been on a mock jury for a personal injury lawsuit--and it was obvious to a couple of us that the smoking gun presented by the defense clearly showed she was running up the bill on something minor. We were pointing out the problem--did that sway the majority? No. The general opinion seemed to be she was owed something for what had happened--and they had failed on the voir dire, they asked about my background, didn't ask anything about family. Oops--I knew it would end up all going to the lawyer and doctors, nothing to her (the proposed amount was less than the bills she had run up.) I played it fair and didn't speak up about what would happen.
And all the national systems have a fox guarding the henhouse problem. Provide proper treatment for the expensive stuff or lower the standards? So long as you make a sufficient portion of the electorate think you're doing a good job the reality is the standards get lowered. And cook the books in pretending it's fair. (Two examples that come to mind: Including "fairness" in the measure of health system quality--automatic selection for UHC, and comparing infant mortality (they admitted the comparison was not valid, did it anyway.) The reality is the biggest "cause" of infant mortality in the developed world is how the medical world falls on the stillbirth/infant mortality line. Even elsewhere--Cuba gets it's good infant mortality numbers by setting a minimum birth weight. The ones that were born too early and never had a chance get classed as stillbirths.)
I’m concerned with anyone proposing “Medicare for all” in America, because they all state - for doctors who want to stay out of the system, they can be paid directly… that immediately causes a slightly different 2 tier system. Right now our 2 tier system is the 90% with health insurance and the 10% without health insurance. In the new Medicare for all, it will be the 99.9% on government insurance, and the 0.1% - the ultra wealthy - who dominate tax policy and are heavily financially incentivized to reduce their tax contributions to the public system. They will influence politicians to spend less on healthcare, with no impact to their health outcomes. The only system which will work in the US is one in which the ultra wealthy have an incentive to provide funding to the public system, and that seems like you’d need to force them to be on the public system too.
> The only system which will work in the US is one in which the ultra wealthy have an incentive to provide funding to the public system, and that seems like you’d need to force them to be on the public system too.
In my state, I pay $15k/year in school taxes, yet I have no children. I pay $1000/year in property taxes to support my city's library, yet I don't have a library card. People are taxed for lots of things they don't actually benefit from. I don't think we would need to force rich people to use the plans. If they want to buy medical services from private doctors, sure we can let them.
The issue then becomes more about allocation of resources (how many doctors are available to be seen on the public system vs. only available to self-pay customers) rather than the issue being about how to collect taxes.
you can either build good schools or good jails, so contributing to your schools is contributing to your town infrastructure.
There are no good jails.
This may be small potatoes, but I've heard it said that people like you benefit "by not living in a state full of dumbasses." There's definitely an indirect benefit from these payments.
Exactly, same with health insurance! I'm less likely to get sick if everyone around me has access to doctors when they get sick.
(I personally don't mind subsidizing my library + local school district... good schools and libraries are good for the community)
> (I personally don't mind subsidizing my library + local school district... good schools and libraries are good for the community)
Just sharing random coffee break thoughts... it always blows my mind is how many people _don't_ think like this. When base conditions improve for society, the conditions improve for _everyone_ regardless if they directly benefit you.
I'm also in the boat where I don't have kids, but I'd also like to live in a place that has educated people - so schools make perfect sense to me. Heck, even if I didn't benefit from it, providing children education is just the gosh-darn right thing to do.
IMO it's because there's both benefit and waste/corruption in these kinds of social benefit structures. some people choose to only see one or the other:
"these benefit everyone including those who don't use them directly! how could you be against it?"
"this money that I'm having to pay is either overpaid to corrupt vendors, or just straight wasted, why would we ever want to increase how much we're paying into this system?"
in reality you can't have one without the other. it's up to each person to decide whether they can take the bad with the good
> how many people _don't_ think like this
It's just lack of trust. It's not that people want a worse community, it's that they have a hard time believing that taking extra money from their paycheck will create a better community.
Part of it is real; seeing massive amounts of state/local government waste and corruption makes it feel safer to keep your extra dollars instead of giving them away.
Part of it is difficulty evaluating timelines; more tax dollars for a better elementary school to be built in 3 years and to yield higher educated people 18 years from now it a lot to bet on.
Yes, universal health will start saving money even during the first transition year. We spend almost 1/3 or more of those total health dollars on billing administration. That amount surpasses the uninsured number. And the reality is if we can get medical care during the daytime, eventually emergency rooms might get less hectic. My hope is that more days than not ER personell have to pass the time like at a Firehouse.
Not only are you less likely to get sick,
You're less likely to see sick people.
Healthy people are more productive (you'll have better businesses)
Healthy people are nicer (especially if we consider mental health, and then violence)
Healthy people use the ER less.
That would require that the more tax money the school system gets the smarter the students will be. Every time I see a bill for increasing school taxes their justification is not for improving education quality, but for some other pet project they want to do.
You're never going to make a system that prevents the ultra-wealthy from augmenting it with private services. You might, however, reduce the power of the ultra-wealthy.
This is precisely what allows for the NHS to be cannibalized. They underfunded one of the best systems of healthcare and replaced it with private care for ultra wealthy while reducing quality of care for vast majority of people.
> is the 90% with health insurance and the 10% without health insurance
it's even more complicated, because you can have insurance fully accepted at one clinic and "not contracted" with a different clinic. it's a total mess.
Every western country that has a single payer system as far as I know allows for private clinics, doctors and labs.
I spent 18 years in Canada. The healthcare I got was as good as anything I received in America (in both cases it depends on where you live, unfortunately) and looking ahead to 2026 was cheaper (comparing my tax burden in Ontario to the terrible insurance I can afford for 2026 in America).
That's the same as most countries then.
All the categories on the right side look perfectly reasonable. However what fraction of those big categories on the right, Hospitals and Physicians... that make up over half of the total, is siphoned off to pay for administratium or "shareholder value" and what fraction actually pays for medical care delivered?
If by shareholder value you include insurance companies etc not just the institutions themselves, it’s well over half.
Doctor time talking to an insurance company either directly or through paperwork is not actually providing any care during that time. Where things go vicious is because doctors are now so inefficient the time they are actually useful becomes increasingly valuable driving ever more paperwork to justify that time.
I'd really love to see the breakdown between how much we spend on physicians/doctors vs. caretakers (nurses, therapists, etc.) vs. how much on hospital admin and other stuff.
At least in UK's chart, "GP & Primary Care", "Private GP Services" and "Administration" are separated. Same in Germany too.
Yes, the diagrams are deeply flawed, in that they seem to suggest 100% of the money input to the system goes to hospitals, hospices, healthworkers, and so on.
I don't see a single outcome pointed at insurance companies... somehow.
The article takes this on a couple times:
> The outcome is $4.9T - which would make it the 3rd largest economy in the world, a high 8% admin costs - compared to the UK’s 2% admin, with medical bankruptcy still possible. We’ve never agreed on what we value. So we built a system that embodies our disagreement: employer-based coverage (market choice) plus Medicare (social insurance) plus Medicaid (safety net) plus exchanges (regulated markets).
> Decision #1: Workers pay at least twice
Here’s the first thing that jumps out: if you work a job in America (and you presumably do, to afford the internet where you’re reading this), you’re already paying for healthcare in multiple places on this chart:
> Could America make this choice? Technically, yes. Politically, we’d need to agree that healthcare is a right we owe each other, funded collectively through taxes. That would mean massive tax increases, eliminating private insurance as the primary system, and trusting a single federal agency.The operational resistance alone would be too much: I’ve watched hospital execs squeeze out thinning margins and payer executives navigate quarterly earnings calls. We’re talking about unwinding a $1T+ private insurance industry, reconfiguring every hospital’s revenue model, and convincing Americans to trust the federal government with something they currently (sort of) get through their jobs. That ship didn’t just sail - it sank decades ago.
We've unwound industries before - if we have the political will we can do amazing things.
But the people in and using those industries have no desire to change so anything that does happen is likely to occur slowly from expansion - e.g, bringing Medicare to earlier and more people, and expand children coverage, etc.
I think there's some significant evidence that "users" of the private healthcare industry are actually quite unhappy about it. Due to some structural quirks of the US, it seems like it's less about how many people are happy or unhappy and more about how many dollars are spent in favor or opposition of a change.
Those are probably the easiest levels for simplification, but I'd expect significant pushback anyway. Something like start medicare at 55 would be a huge difference to most providers, just due to changes in reimbursement.
There's always pushback - the key is to identify who will push back, what their motivations are, and if you can do something to "disarm" them.
"A Fairytale Map of Every Dollar of America's $5T Healthcare System" is the complete, accurate title.
Is this funded by an insurance company?
The author calls himself a "Real Estate Novelist and recovering healthcare consultant" (https://substack.com/@andrewtsang).
Did he ever have time for a wife?
Ah, so it's fiction?
It would help if you would say what exactly you think is wrong with it.
Taken together, as Andrew Tsang (too) beautifully depicts, the United States Healthcare system is arguably the largest bureaucracy on planet Earth. Larger in employees and collective spending than any effective bureaucracies in India or China.
> So what does the US value?
Every time we (the US) try to fix / change anything, a bunch of wonks with irrational arguments whine and complain until they get their way. The initiative fails, and we don't fix / change anything.
In short, we value letting irrational sabotage any form policy making; because we don't exclude people who negotiate in bad faith.
Or people are acting in good faith (generally) but want to avoid being accountable for something deeply serious. You end up with a web that neatly prevents anyone really being held responsible for anything. In an industry that was supposed to be vocational and treat its duty as sacred.
One large thing missing. Where is the flow to insurance company profit, and provider profit?
Here's an idea. If other countries can provide healthcare for much less per patient, why can't they sell that to Americans?
In other words, allow US citizens to "opt out" of the US healthcare system and participate in the German one? You'd have to make some allowances for replacing taxes with costs, billing, and allow "German" healthcare to operate in the US ...
Basically every bit of the current system, from how much people are paid to how a hospital looks like, is a side effect of the way we pay for healthcare, and the way we decide which provider to select. So we cannot just wave a magic wand and get the German system, as a whole lot of capital decisions are now just straight out wrong.
We see similar things in education. People wonder how many European systems are cheaper than US universities: Well, it's very easy to see once you attend a university in Spain and then one in the US. The shape of the university, from facilities to salaries to class sizes, make them look like completely different organisms, even though 18 year olds come in from one side and come out with degrees in the other. And note that this is also connected to healthcare: How many doctors do we train, or bring in from other countries? How many years do they spend training, and how much debt do they incur getting training? How much are they going to ask in pay just to handle that debt?
Changing the US system is a very good idea, but the changes would be very traumatic to most people working for the system, or invested in the system. All of them would lobby against changes that make their lives worse, and therefore makes legislature that makes the change happen very difficult to pass.
I don't think US doctors will want to work for German pay.
Resident salary: approx. € 60,000 - 75,000 Specialist salary: approx. 75,000 € - 98,000 Senior physician salary: approx. € 90,000 - € 150,000 Chief physician salary: approx. € 150,000 - € 370,000
Seems fine? Especially if you subtract a substantial amount of benefits fringe.
Sure it’s fine. It’s also a significant pay cut for almost every American doctor.
Normal specialists in the US out-earn chief physicians in Germany by hundreds of thousands of dollars. All the fringe benefits in the world aren’t gonna buy you a new boat.
Are you comparing residents to specialists? They're not at all comparable. Residents in the US are typically within 3–7 years of graduating med school and are not able to practice independently. Specialists have typically finished 6–9 years of training after graduating medical school and are independent practitioners.
Source: am a US physician.
US doctors earn that every 12 weeks.
Time for a change.
"Seems fine?" isn't a very solid argument.
That's why you let German doctors work for German++ pay ;).
Healthcare insurance works when everyone including currently healthy people participate. What would happen is only Americans needing an expensive healthcare signing in.
The systems are so different there's no product to sell, it's a whole system of healthcare that permeates through society... You can't sell a national-level system of healthcare as a product, it's done through policy.
You can go one step further and make this a time-series. Costs skyrocketing. Quality of care actually going down across the country but especially in rural settings. Provider satisfaction plummeting. No one is happy…except greedy executives and shareholders.
> No one is happy…except greedy executives and shareholders.
It is a fairly effective system to extract money from customers (patients) while also ensuring that patients do not use too many services (afaik, US population has shorter life spans than rest of Western world).
One of the best explanations I have ever read about American Healthcare. Even after such good infographic it is still hard to comprehend such complexity.
> The $441B in prescription drugs - the story of incentivizing American innovation over price controls.
This itself speaks for how messedup the entire design is.
It actually doesn’t incentivize innovation. That’s the biggest scam in healthcare. If it actually led to innovations and notable uptick in quality, other countries would have done the same. The whole argument is so flawed it makes my brain hurt.
I think the author seems to be using sarcasm when he said innovation.
If we're gonna stick with private insurance in the US, we should detach it from employment. The current system has created a society of indentured servants, not for money, but for "health insurance". The current system is expensive for employers that are often mandated to provide health insurance plans. And it forces people to work for something they have little or no control over.
When you work for money, you can do whatever you want with the money once you've earned it. But being compensated with "health insurance", you've got almost no control over it; you get what the company gives you - and btw, you can't purchase the same thing on your own, with your own money (way too expensive for most middle-class folks).
Detach health insurance from employment. Open "health insurance plans" to the free market, just like auto insurance. Free employers from all the administrative overhead of managing health insurance for employees (the stock market will love it!) And let health insurance companies work for their actual customers (health care patients!)
Or, just open Medicare to all.
So it's a jobs program
Not all of it, but definitely the insurance part of it IMO.
It's hard to get an actual number, but many say nearly 1 million people work in health insurance in the US. And I'm not sure that even counts the people whose job it is to interface with them. That's a ton of jobs(and salaries) that likely wouldn't even exist in a sane system.
> It's hard to get an actual number
It's tracked by the Dept of Labor.
It is, but under "life, medical, and health" insurance, and only based on the employer not function. Any contractor like say, maintenance, janitorial, cafeteria, etc for the building would not be counted. People who work at hospitals doing nothing but insurance related work would also not be counted. That makes it hard to say definitively how many jobs would actually be affected, in my opinion.
The healthcare system in the US is, indeed, the best...if you're rich. If you're not rich, you're gonna spend a lot of time on the phone, arguing with bureaucrats and getting treated like shit.
A friend of mine is rich. We both have a health insurance plan from UnitedHealthcare. His experience is radically different from mine. He can make a phone call, and actually talk to his doctor within a few minutes. He can see his doctor the same day he asks to. He talks to one person who manages all the BS for him.
> If you're not rich, you're gonna spend a lot of time on the phone, arguing with bureaucrats and getting treated like shit
Sounds a lot like the Spanish healthcare system.
> The healthcare system in the US is, indeed, the best...if you're rich.
Actually, the data doesn't even support that notion for the rich. But then, they can opt to fly to a specialist...
I wish they had this per capita in each country, so we could compare them.
Where are salaries? Where are administration overhead? Where are insurance company profits and dividends coming from?
This whole thing loses all credibility by not listing those things.
The problems and solutions are all well documented. Like the article mentions, there are many existence proofs of cheaper more effective systems. The real problem is the legalized bribery that prevents any action and the current media environment that pushes people to consume partisan rage slop so we don't hold mediocre politicians accountable.
I'd be more interested in how much of that $5 trillion finds its way to shareholders.
Most people generally don't have a problem with the idea of being charged a fee for a healthcare service. They have a problem with a system that grossly inflates that fee so that people who had nothing to do with the service get paid at the expense of people who are ill or injured. And of course, with the people in the system who are heavily incentivized to make sure that those dead-weight actors get as much money as possible.
Insurance == Social Disease
There is a healthy concept of insurance where people pay to hedge against potential risk, and that's all fine and good. But one of the most insidious social diseases is mandatory insurance, or industries expecting individuals to insure themselves in any capacity whatsoever.
It is never ok for a business (or government) to offer a service that comes with risks, but then ask their customers/subjects to insure themselves for the risk to the business/government.
If I am charging people $100 for a service, then I ask them to insure themselves and everyone reliably insures themselves (the majority at least), they can still afford to pay my me $100, so why don't i just raise the cost to $100+$10000 where $10000 is the maximum the insurance will pay? You see the problem right, all the insurance achieved is the increase in prices, people still pay the same, you just now have a middle-man economy sucking up all the wealth/value people are generating.
If we could all agree on one thing, I wish it would be this. No more mandatory insurance in any context. Not fire, not flood, not health, not cars. Optional is fine, people who can afford it can hedge against the risk. But a bank shouldn't require fire insurance on mortgaged homes.
Businesses must eat the cost of doing business, in the end the price increase they impose will be less than the price increase of insurance mandates. That, or greed should be a felony (not happening).
For health insurance, it should be a simple subsidy for those who can't pay out of pocket. Some industries must be regulated, even in a capitalist free-market country. Health care, prisons, law enforcement, defense contractors, banks to name a few. Regulated as in centrally price-controlled.
For uninsured people that get sick, house burns down, car accident,etc... the government (for health care) or businesses convert the cost to debt. Same as when someone takes out a mortgage and refuses to pay at some point, or refuses to pay their car notes.
It's like we have had this 50+ year running experiment, it's failing really badly and everyone is coming up with ideas that don't involve scraping the experiment, just modifying it and waiting a bit longer to see if it works out.
> so why don't i just raise the cost to $100+$10000 where $10000 is the maximum the insurance will pay?
Theoretically because you are not the sole provider offering that service and the patient could go elsewhere, or in this case, the insurance company would require the patient to go elsewhere. Obviously, this sucks absolute donkey balls and health care will always involve a healthy dose of "I can't just shop around for where to get help for a heart attack".
In my naive opinion banning discriminatory pricing (no special negotiated insurance pricing), the sale of medical debt, and counting bill forgiveness as tax deductible charity would be a good start. With the absolute technical and capital-intensive marvel that is modern health care I just don't see anyone being able to reasonably get away with no insurance. Maybe there is a mandated co-insurance for all plans that could be covered by HSA accounts that everyone would get access to. That way there is a cost that is transparent to the patient that scales. At that point though I would just go to single payer.
(Rant incoming) Another thing that might need to happen is billing caps based off of certain outcomes. Especially in the emergency medicine realm. If you go to the emergency room and rack up a huge bill for something simple there should be a cap on the amount the hospital can actually recover. All I see is (rightfully) constant bitching and moaning from ER staff that people should be going to primary care or urgent care for issues which are less resource intensive and cheaper. The issue is the ER could provide those same services for just as cheap. Build out those same capabilities in or near the ER. The triage nurse can then send those low priority patients to the facility right down the hall. The issue is hospital admins have no incentive to do that, because as you said, why bill $200 when you can bill a minimum of $2,000 when you have your patient captive.
I also think it is silly we ask people to self-triage. It externalizes a lot of the costs to other parts of society. I can attest to this from the constant Volunteer Fire Department air-raid sirens I hear followed by a "EMS to Well Now Urgent Care for Patient in Distress". I'm sure the volleys love having their evening interrupted when it could have been a simple walk down an aisle.
Absolutely agree on the negotiated price bit. That is the root of an awful lot of evil.
I have no problem with the sale of medical debt--what's needed is sanity in the debt collection business. Combined with making one-party record the law of the land--you're automatically free to record telephone calls without notice.
Bill forgiveness as charity? No, that's counting twice. They didn't collect the debt in the first place, there is no profit to be taxed and thus you are deducting $0.
ER: Two problems here.
ERs are mandated to stabilize a patient, urgent cares are not. Thus you see people in ERs with situations that could be handled in an urgent care because the urgent care rejects them for unpaid bills. And the ER can't provide those services just as cheap--a big part of what you're paying for in the ER is potential even if it's not actually used. The freestanding radiologist books their machines as solid as can be done without too much friction. The ER needs the same machines but needs them available NOW. I've been in an urgent care over a kidney stone--they had a CAT manned and ready to go at 3am (the only urgent care in town even open at those hours even before you consider the machines--every ER needs those machines 24/7.) CATs don't cost much to run, the main cost is the machine and personnel time (operator and radiologist) and that's incurred whether it's doing anything useful or not. (And then the urgent care punted anyway. Yeah, you're right, stone, we can't deal with it, go over to the ER.)
I will also say that transport isn't always as simple as you make it out to be. Consider that stone I just mentioned--the ER was half a mile away, trivial under normal conditions. Even under those conditions I could have *slowly* walked it--except there was a major street in the way and I most definitely did not want to cross that. Is a taxi going to take the call? No. Call a friend/rideshare/ambulance.
so long as insurances are the "single payer" the problem will never go away. The single payer should either be individuals or the government (by mandate).
> For health insurance, it should be a simple subsidy for those who can't pay out of pocket. Some industries must be regulated, even in a capitalist free-market country. Health care, prisons, law enforcement, defense contractors, banks to name a few. Regulated as in centrally price-controlled.
Maybe not now, but 10-ish years ago that was the French system. Very poor people get outpatient care that is free at the point of service. Everyone else gets highly regulated private insurance with a strong market component. Emergent/inpatient care is provided by hospitals that aren't part of the insurance system.
There are definitely some trade-offs there, but I wouldn't be opposed to such a system in the US.
States should do their own trade-off calculation maybe, but at the federal level the policy makes sense.
The more free market an industry/service, the more efficient the outcome.
Why do people readily accept this for everything else, but don't see the reality in regards to healthcare?
1) Some people have more expensive problems than others. The average person can't realistically budget for big things.
2) The "efficient" option is to let the big problems die.
Could you please define "efficient"?
and also "free market"?
oh, and just for fun, also define "outcome"
Assuming we take the statement "more free market equals more efficient outcome" as always and absolutely true, it raises the question: Are the healthcare-related needs of a society aligned with the most efficient outcome that a free market can deliver? I don't think they necessarily are.
the more competitive, orderly, and fair market, the more efficient the outcome
that is _not_ synonymous with "absent of regulation."
market failures exist, believe it or not.