View Poll Results: Why are Medical Costs, so high?

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  • Nature of Capitalism

    10 31.25%
  • Insurance Companies

    16 50.00%
  • Medicare, Medicaid

    6 18.75%
  • Specialization

    5 15.63%
  • All the Above

    10 31.25%
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Thread: Cause of Medical Costs?

  1. #31
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    Re: Cause of Medical Costs?

    Quote Originally Posted by MaggieD View Post
    In 2011, we were spending over 17% of our Gross Domestic Product on healthcare, dwarfing country #2 by a full 25% in dollars. And we are #1 in this percentage. Next closest is spending 9.3% of GDP. And $3,000 less per capita. Do you think we have the best healthcare in the world? I don't.

    List of countries by total health expenditure (PPP) per capita - Wikipedia, the free encyclopedia
    I don't think we have the best in the world but better than Canada, Britain, France, India, China, Russia, Mexico, etc.
    Einstein, "science without religion is lame, religion without science is blind."

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    Re: Cause of Medical Costs?

    Quote Originally Posted by MaggieD View Post
    In 2011, we were spending over 17% of our Gross Domestic Product on healthcare, dwarfing country #2 by a full 25% in dollars. And we are #1 in this percentage. Next closest is spending 9.3% of GDP. And $3,000 less per capita. Do you think we have the best healthcare in the world? I don't.

    List of countries by total health expenditure (PPP) per capita - Wikipedia, the free encyclopedia
    It would be interesting to know what perentage of that goes to malpractice insurance overhead and the tests done to "prove" that the treatment option selected was "the best". If we accept that 15% to 20% of "private" medical insurance overhead is normally added then that cost is likely higher than most other nations as well. How many other nations have 1-800-BAD-DRUG shysters?
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

  3. #33
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    Re: Cause of Medical Costs?

    Quote Originally Posted by MaggieD View Post
    In 2011, we were spending over 17% of our Gross Domestic Product on healthcare, dwarfing country #2 by a full 25% in dollars. And we are #1 in this percentage.
    That doesn't tell us the whole story. What we need to keep in mind is that medical care is a superior good, which means that it is the type of good where consumers are willing to spend more as they get richer.

    Luxury cars are a superior good. Luxury homes are a superior good. Canned Spam is, on the other hand, an inferior good. As people get richer, they're less and less willing to buy canned Spam.

    The US is a rich country. Not all of us are rich of course, but when we look at the nation as a whole, then we're doing better than other nations.

    To give an example. About a decade ago, Canada had 151 MRI machines and the US had 10,000. We'd have to get rid of 8,600 of our 10,000 to get down to their MRI/ per capital level. The point is that Americans like having all of this expensive technology available. We're not that much richer than Canadians, but Canadians also ration the access to their MRI machines and so can contain some costs. We don't have that same degree of rationing - Americans don't want to wait 3 months for an MRI scan and so this is why we have 10,000 machines and why we pay so much for medical care.

    Quicker access costs money. Medical care being a superior good means that people are willing to pay. Now being willing to pay doesn't exactly translate into being happy to pay, it just means that given a choice between paying and getting the service or not paying and not getting the service, people will pay and bitch about it.

  4. #34
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    Re: Cause of Medical Costs?

    Regarding specialization there is a factor that hasn't been mentioned. There is a trend in allied medical professions such as physical therapy and audiology to have states pass laws that require doctorates as the minimum level academic requirement for certification. People with existing certification have been grandfathered in, but all new grads must have doctorates. Why has this trend occurred? Direct billing to Medicaid & Medicare. Of course costs increase because patients are now paying for people with doctorates. We're also seeing these fields establishing a "need" for special support staff with bachelor's degrees, such as audiology techs. Somebody is paying for all this. Guess who?










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  5. #35
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    Re: Cause of Medical Costs?

    Quote Originally Posted by MaggieD View Post
    In 2011, we were spending over 17% of our Gross Domestic Product on healthcare, dwarfing country #2 by a full 25% in dollars. And we are #1 in this percentage. Next closest is spending 9.3% of GDP. And $3,000 less per capita. Do you think we have the best healthcare in the world? I don't.

    List of countries by total health expenditure (PPP) per capita - Wikipedia, the free encyclopedia
    There's a difference between best healthcare and most access to healthcare. I'd argue that those who provide healthcare services in Canada are second to none - it's why many Canadian trained doctors, nurses, EMTs, etc. are actively recruited for higher paying positions throughout the US, particularly in the sunbelt/southern states.

    That said, there's no doubt that even if you have the cash in hand, many services readily available in the US aren't available here in Canada or if they are, they aren't available in as timely a manner. Secondly, even though many medical breakthroughs initiate in Canada, many times more are discovered in the US where the financial incentive drives discovery. In addition, our government frequently funds healthcare services for patients to travel to the US for services needed quickly or that aren't available at all in Canada.

    We here in Canada benefit greatly from the market driven medical services economy in the US.
    "Liberals claim to want to give a hearing to other views, but then are shocked and offended to discover that there are other views." William F. Buckley Jr.

  6. #36
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    Re: Cause of Medical Costs?

    Quote Originally Posted by RiverDad View Post
    That doesn't tell us the whole story. What we need to keep in mind is that medical care is a superior good, which means that it is the type of good where consumers are willing to spend more as they get richer.

    Luxury cars are a superior good. Luxury homes are a superior good. Canned Spam is, on the other hand, an inferior good. As people get richer, they're less and less willing to buy canned Spam.

    The US is a rich country. Not all of us are rich of course, but when we look at the nation as a whole, then we're doing better than other nations.

    To give an example. About a decade ago, Canada had 151 MRI machines and the US had 10,000. We'd have to get rid of 8,600 of our 10,000 to get down to their MRI/ per capital level. The point is that Americans like having all of this expensive technology available. We're not that much richer than Canadians, but Canadians also ration the access to their MRI machines and so can contain some costs. We don't have that same degree of rationing - Americans don't want to wait 3 months for an MRI scan and so this is why we have 10,000 machines and why we pay so much for medical care.

    Quicker access costs money. Medical care being a superior good means that people are willing to pay. Now being willing to pay doesn't exactly translate into being happy to pay, it just means that given a choice between paying and getting the service or not paying and not getting the service, people will pay and bitch about it.
    Great post.

  7. #37
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    Re: Cause of Medical Costs?

    Quote Originally Posted by CanadaJohn View Post
    There's a difference between best healthcare and most access to healthcare. I'd argue that those who provide healthcare services in Canada are second to none - it's why many Canadian trained doctors, nurses, EMTs, etc. are actively recruited for higher paying positions throughout the US, particularly in the sunbelt/southern states.

    That said, there's no doubt that even if you have the cash in hand, many services readily available in the US aren't available here in Canada or if they are, they aren't available in as timely a manner. Secondly, even though many medical breakthroughs initiate in Canada, many times more are discovered in the US where the financial incentive drives discovery. In addition, our government frequently funds healthcare services for patients to travel to the US for services needed quickly or that aren't available at all in Canada.

    We here in Canada benefit greatly from the market driven medical services economy in the US.
    Interesting, CJ. And you remind me of a good friend whose brother died of pancreatic cancer before his appointment for an MRI came up (or CAT scan, don't remember which). I made him feel better when I told him that his brother's pancreatic cancer was terminal. He hadn't known that. I don't know, though . . . maybe there's a lesson in that. His brother avoided grueling chemotherapy and was eased on his journey through hospice and a palliative care regime. Great Britain, by the way.

  8. #38
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    Re: Cause of Medical Costs?

    Quote Originally Posted by MaggieD View Post
    Interesting, CJ. And you remind me of a good friend whose brother died of pancreatic cancer before his appointment for an MRI came up (or CAT scan, don't remember which). I made him feel better when I told him that his brother's pancreatic cancer was terminal. He hadn't known that. I don't know, though . . . maybe there's a lesson in that. His brother avoided grueling chemotherapy and was eased on his journey through hospice and a palliative care regime. Great Britain, by the way.
    I agree - for me, if I ever become so sick or if I ever become less than self-sufficient, I sure hope we have laws in place that allow a doctor or other healthcare practioner to put me to sleep, forever - I want nothing less than what is available to the pets I've loved over the years.
    "Liberals claim to want to give a hearing to other views, but then are shocked and offended to discover that there are other views." William F. Buckley Jr.

  9. #39
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    Re: Cause of Medical Costs?

    Quote Originally Posted by grip View Post
    If medical insurance weren't a problem there wouldn't be a need for Obamacare. Even with higher deductibles the medical insurance costs have been extreme. If you have a $5000 deductible, in which case you almost don't need insurance, you still pay over $75-$150 a month.

    When I was healthy in my 30's, I purchased a good PPO plan thru my employer for $12 a month in 2000 with a $500 deductible. It quickly after the next few years went up to $270 a month and $1500 deductible, which was cutting into my paycheck. The reasoning explained to us was that insurance companies weren't making enough money.
    The difference in annual premiums (from your examples above) is $195 to $120/month - at that rate one could save the $3500, your stated deductible difference, in about two years in a (tax free) MSA. As the MSA balance grows one could then raise the deductible further - saving even more.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

  10. #40
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    Re: Cause of Medical Costs?

    Quote Originally Posted by CanadaJohn View Post
    That said, there's no doubt that even if you have the cash in hand, many services readily available in the US aren't available here in Canada or if they are, they aren't available in as timely a manner.
    Hence the Premier of Newfoundland flying to the US to have heart surgery instead of having it done by staff in a hospital in his own province. He knew that it would be terrible politics to jump the queue and get immediate heart surgery just because he was the Premier, so instead of waiting for months on a list, as the citizens of Newfoundland do, he paid for the surgery in the US and was treated immediately.

    To offer service in a timely manner means that the entire medical system has to have the slack built into it to push people through with no back-ups in the pipeline. This also means that all of the capacity can't be used at 100% efficiency. To operate at less than 100% efficiency means that you're paying more for those underutilized assets.

    In addition, our government frequently funds healthcare services for patients to travel to the US for services needed quickly or that aren't available at all in Canada.
    British Columbia has a population of 4.4 million and the city of Spokane, WA has a population of 209,000. I have no clue how many hospitals BC has but whatever the number, every single one of those hospitals had their neonatal care units running at full capacity and a small American city had unused space in their neonatal care unit:

    At least two premature Canadian babies sent to the United States when no bed was available for them at home are now stable enough to return to a British Columbia hospital. There's only one problem: There are no beds for them.

    Consequently, the two infant girls will have to stay in the neonatal intensive-care unit at Deaconess Medical Center in Spokane, Wash., until a bed becomes available in B.C., said Patrice Sweeny, the hospital's assistant manager of the neonatal intensive-care unit.

    "Bedline calls us every day," Ms. Sweeny said of the company, bcbedline, which locates emergency- and critical-care beds for B.C. citizens on behalf of doctors. "They have not had a bed yet. We're just waiting. But as soon as they have a bed, we'll send those babies back ... It's just a crisis up there."

    Over the past six months, at least 40 patients from three provinces have found themselves smack in the middle of a medical drama. With no neonatal intensive-care beds available for the babies in Canada, provincial government officials were sent scrambling, trying to find care south of the border.

    The babies' mothers, who have been sent abroad to Washington, Montana, Michigan and New York, were typically those who went into labour before 32 weeks gestation - at least two months early. Their babies require the highest level of neonatal intensive care, often needing a ventilator to assist breathing.

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