Category Archives: Health Economics

Even with Medicare the U.S. lags behind other countries in healthcare access,  costs and quality.  This graph from the Commonwealth Fund survey of older adults says it all.

Among American seniors, 21 percent had out-of-pocket medical expenses that topped $2,000 and 11 percent had problems paying their medical bills. In Norway and Sweden, 1 percent had problems paying; in Germany, 3 percent.

“As good as Medicare is – it provides excellent coverage over all – it still isn’t as protective as the coverage people get in other countries,” Ms. Osborn said. Its deductibles and cost-sharing requirements still leave many Americans scrambling to afford drugs and doctors – which also cost more here.

Read the article for more.

Medicynical Note:  The basic premise of those involved in healthcare in the U.S. is different than in other countries.  Instead of assuring   value, quality and access, our system is devoted to assuring excessive financial returns to providers, insurers, drug companies and hospitals.  Protections are in place not to assure good quality affordable health care but rather to guarantee profits.

Some examples of this include congress forbidding the government from negotiating price of drugs purchased by Medicare part D; the generation long monopoly afforded new drugs without assuring reasonable pricing (one of the requirements of the Dole-Bayh law that is not enforced); the obscured price of services at medical facilities–insurers pay half of what an individual would pay for the same service.  It’s worse than buying a used car. And so on.

Another only in American moment. 

Nearly 20 percent of U.S. consumers with credit records — 42.9 million people — have unpaid medical debts, according to a new report by the Consumer Financial Protection Bureau.

The findings suggest that many Americans are being trapped by debt because they are confused by the notices they get from hospitals and insurance companies about the cost of treatment. As a result, millions of Americans may be surprised to find they are stuck with lower credit scores, making it harder for them to borrow to buy a home or an automobile.

Medicynical Note:  Not only do we have the most expensive, inefficient health care non-system in the world, but we also lead the world in medical debt and bankruptcy (a category of bankruptcy unknown in other industrialized countries).  Even with the Affordable Care Act, this problem persists. 

Instead of doing something about it our new republican congress wants to make it worse by doing away with the Affordable Care Act (the only progress in 30 years) and replacing it with …………….nothing.  Amazing. 

America isn’t fit to lead the world until it gets it’s own house in order. 

This poorly reasoned self pitying whine appeared in the Washington  Post.  In it the author bemoans having to pay about 13% more for insurance  than she paid in 2013.  Part of that was the yearly increment of insurance and part just and increased payment for better coverage.  The author and her spouse are in their late 50’s he has prostate cancer and a history of  heart surgery.

Since his heart diagnosis in 2005, Jim, who probably couldn’t have found a policy as an individual because of his condition, had been covered by small-business group insurance — because his self-storage business in Banning had one other employee. But his work, and his coverage, were always subject to change.

I remained vulnerable as a freelance writer and part-time university professor who had to pay for her own health insurance. I also had had a few health hiccups, including surgery to repair a herniated disk from spinal degeneration, and so I lived with the daily realization that one bit of bad health news could cause my policy to be canceled

Absurdly she complains

We have no choice to opt out of the required pediatric dentistry or maternity coverage we’ll never use, so we’ll eventually have to settle for less generous policies, with higher deductibles and out-of-pocket maximums.

But she notes that in the first year of coverage it more than returned the additional cost in better coverage for her husband’s cancer–which in turn was funded by people who had no need for cancer treatment.  But that’s the way insurance is supposed to work.  Read the article for more:

Medicynical Note:  Yes the system, thanks to the republican opposition to a simple single provider approach, is convoluted and complicated.  Yes you have to have comprehensive coverage that includes some things that you don’t really need at this time.  But in this woman’s case she and her spouse get guaranteed insurability at an affordable rate.  Pre-health reform it was normal for people with illnesses like her husband’s to have their insurance cancelled or their premiums doubled.  Paradoxically in that non-system the goal of insurers was not to cover sick people so as to maximize profits–health care is really not their primary concern. 

The Affordable Care Act has enabled millions of uninsured to get coverage but it does need to be viewed as a first step.  The process needs simplification; insurers need to become more efficient (their 20% or so profit is unacceptable); and yes costs need to be controlled.  It should be noted that this year we had the lowest increase in health spending in 30 years.

But despite the progress, our conservative friends can still revel in the facts that the U.S. still has the most expensive, least efficient health care in the world.  We are number one in costs, uninsured and bankruptcy from medical costs.   They seem to like it that way.

In the U.S. we have no system of health care but rather a well oiled revenue generating infrastructure that incidentally provides care while charging excessive amounts.  This distorts our entire economy.  We spend nearly 20% of the GDP for medical related expenditures.  It’s literally your money or your life (Thank you Marcia Angell).

Even with the affordable care act in force this still happens.

The woman tells WISC-TV [via Reddit] that in Sept. 2013 she went into cardiac arrest and was taken by ambulance to a hospital that was out of her insurance network instead of the one — only a few blocks farther away — that accepts her Anthem Blue Cross coverage.

Had she gone to the in-network hospital, she’d only have been hit with about $1,500 in expenses. But since she was taken to the other hospital, she now has to pay the huge difference between what her insurance company paid the hospital and what the hospital charges.

“I was in a coma,” explains the woman. “I couldn’t very well wake up and say, ‘Hey, take me to the next hospital.’”

Read the article for more.

Medicynical note:  For my friends who think the “free market” is the solution and that we merely need to shop for the best price and become informed before purchasing,  this woman’s situation typifies health care.  It is not discretionary, it is often emergent, there may not be another option locally, pricing is unclear,  often obfuscated and not fully apparent at the start. 

The U.S. remains the only industrialized country in the world without a national health program, the only country in which people go bankrupt from health care expenses, which are by far the highest in the world. 

And the newly elected republican congress wants to make things worse.  America is truly exceptional. 

Make no mistake for the pharmaceutical industry, it’s the money that counts.   Gilead is now marketing two drugs for hepatitis C costing in the range of $80-100,000 for the pills alone.  That is over $1000/pill.

In the 90’s the drug companies discovered that people with serious life-threatening illness would pay anything for a “treatment” even if it was minimally effective.  They would pay more if the drug actually worked.

For years Pharma’s problem was that people with cancers were not so numerous as those with high cholesterol or high blood pressure  or even diabetes.  As such it was less rewarding to develop new drugs for these patients.  That limitation however became less of a problem  as the price of the drug increased to tens of thousands of dollars/year for the drug alone–and insurers paid.

Now Gilead appears to have hit the trifecta.  First they have a drug that appears to work in a majority of those afflicted.  Second they are charging $90,000/head for the treatment, and third there are millions of people afflicted.  What could be better?

Medicynical note:  The cost of this drug puts to rest once and for all the notion that drug companies have any interest in the well-being of their patients.  It IS the money.  There is little doubt that charging half or a quarter of their asking price would reward the company handsomely for their investment in this drug and provide stockholders a generous return.  BUT as is the case in our drug industry, why charge less when you can get away with more.  After all the disease is often fatal, insurers will pay and patients are desperate.  It’s perfect.

And the price is only about twice the median income (including physicians fees and lab expenses for a year) of people in the U.S.  Affordable, no.  But who really cares?

The CDC’s Mission Statement:

CDC works 24/7 to protect America from health, safety and security threats, both foreign and in the U.S. Whether diseases start at home or abroad, are chronic or acute, curable or preventable, human error or deliberate attack, CDC fights disease and supports communities and citizens to do the same.

CDC increases the health security of our nation. As the nation’s health protection agency, CDC saves lives and protects people from health threats. To accomplish our mission, CDC conducts critical science and provides health information that protects our nation against expensive and dangerous health threats, and responds when these arise.

And in it’s wisdom congress (largely through republican efforts) has decreased the agency’s budget 10% since 2010.

2010: $6.467 billion
2011: $5.737 billion
2012: $5.732 billion
2013: $5.721 billion
2013 (after sequestration took effect): $5.432 billion
2014: $5.882 billion

Medicynic Note:  It’s a little like cutting taxes during a war (of course only madmen do that).