Medicynic

This is self explanatory.  We have the most expensive, most inefficient non-system of care in the world.

Good review of the failure of cost containment in our non-system of health care with suggestions for fixes. 

In case you haven’t noticed there are problems with our “free market” pricing:  (from his paper in Health Affairs)

1. On average, the prices for health care goods and services negotiated by private health insurers in the United States tend to higher — about double or more (medicynical emphasis)— than prices for identical services and goods in other countries of the Organization of Economic Cooperation and Development.

2. It is in good part so because insurers do not seem to have sufficient market power, especially vis à vis hospitals, to resist very rapid price increases.

3. The varying degrees of market power among private insurers in the United States have led to pervasive price discrimination among payers, with prices for identical goods or services varying among payers by factors as high as 10

Reinhardt concludes:

I am persuaded, however, that the opaque, price-discriminatory and administratively unwieldy – and hence very expensive – payment system of individual negotiations over fees has not served Americans well during in the last few decades.

Medicynical Note:  Yet some still maintain our non-system is the “best in the world.”  The question is for whom?

Health Care costs increasing at twice the rate of inflation:

The average per capita cost of healthcare services covered by Medicare programs and commercial insurance grew by 5.28 % in 2011, nearly double the rate of inflation in the larger economy, Standard & Poor’s Healthcare Economic Indices show.
A further breakdown of S&P data shows that healthcare costs covered by commercial insurance plans grew by 7.11% in 2011, while Medicare claim costs rose by 2.51%, despite the government plans’ older and sicker population.

And:

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, told HealthLeaders Media that commercial plans must contend with cost-shifting and other market forces that do not affect Medicare. He says the cost growth acceleration also could be link to the recovering economy.

Medicynical Note:  What’s not noted by Mr. Zirkelbach is that Medicare’s population is sicker, older and has greater need for care than the commercial plan population.  Think he wants responsibility for this high risk group? Think private insurers will provide adequate coverage at reasonable cost to an elderly population with pre-existing illness?  Think again.

Our non-system is not driven by concerns about care; not driven by worries about outcomes; not driven by the needs of patients.  Rather it is the mandatory profit goals of providers, insurers and technology developers that drive our costs. 

FYI last year the poor suffering private insurers had record profits.  Guess who paid?

In olden days practitioners of alchemy claimed they had “the capability of turning base metals into the noble metals gold or silver“.”  In the modern day drug manufacturers have actually achieved this goal.  They have become one of the most profitable industries with margins that even Apple would envy.  Imagine charging over $100,000 for a few milligrams of a product that works for just  a few months—if at all.  (With a few exceptions but that’s another story)

I’m not criticizing the fact that pharmaceutical manufacturers want to help with such problems but rather that they expect unrealistic, unsustainable profits from the endeavor.  They claim that their wildly inflated cost structure is the reason.  But one can counterclaim that they have long gamed the costs by over-paying each step of the way in the drug’s development and marketing based on high profit hopes.  They are inefficient.

It’s a flaw in the “not so free” health market that once a drug is developed manufacturers have a monopoly for a generation and can hype  and overcharge for the drug as much as they want.  They take advantage of the sickest most desperate of our patients by heavily marketing marginally effective product.

It’s not surprising then that other people want in and that counterfeit very expensive drugs are showing up.