Viewing entries tagged
Healthcare System
For comparison, as of 9/30/24, the Dow Jones average net profit margin was 2.46%; the Nasdaq average net profit margin was 16.09%. And according to a January 2024 analysis by NYU Stern School of Business, the average net profit margin for US corporations across 94 industries was 8.54%, based on a sample of 6481 firms.
The authors don’t tell us why Medicare and insurers are increasingly relying on prior authorization, nor do they address the prevalence of unnecessary or low-value medical care or the risks associated with such care. That’s a huge omission. Potential harms should be weighed against potential benefits, the better to find solutions that preserve benefits while reducing harm. As for the prevalence and risk of unnecessary and low-value care, evidence suggests that up to one-fifth of healthcare spending is wasted on such care and around 10% of patients are harmed in the process.
Around a quarter of healthcare spending in the US is wasted, much of it on unnecessary or low-value tests and procedures that do not improve patient outcomes. Here are a few ways countries and healthcare systems are tackling the problem…
What this data tells me is that one reason healthcare spending is out of control in the US is that the cost of healthcare services isn’t being borne by the ultimate consumer - patients - but by third parties, mainly insurers, employers, and the federal government. And these third parties are less sensitive to price than individuals and households (for various reasons, including ability to pay, lack of market power, and an artificial shortage of healthcare providers).
Kamala Harris has pledged to increase taxes on the wealthy should she be elected president. Per the Kiplinger Newsletter, she would bring back the top 39.6% income tax rate for people making $400,000 or more, as well as hike the 3.8% net investment income surtax to 5% for these taxpayers. She also plans to increase the long-term capital gains tax rate for the wealthy.
Should Kamala Harris’s election and tax plans come to fruition, US physicians would take a major tax hit. Why? Because they’re rich.
“During the COVID-19 pandemic, Sweden was among the few countries that did not enforce strict lockdown measures but instead relied more on voluntary and sustainable mitigation recommendations. While supported by the majority of Swedes, this approach faced rapid and continuous criticism. Unfortunately, the respectful debate centered around scientific evidence often gave way to mudslinging. However, the available data on excess all-cause mortality rates indicate that Sweden experienced fewer deaths per population unit during the pandemic (2020–2022) than most high-income countries and was comparable to neighboring Nordic countries through the pandemic. An open, objective scientific dialogue is essential for learning and preparing for future outbreaks.” - The Swedish COVID-19 approach: a scientific dialogue on mitigation policies, Björkman et al, 2023
“The graying of America means that the portion of people who are of prime working age is getting smaller, with fewer workers available to fill open positions, ultimately reducing productivity, straining the federal budget, and slowing economic growth.” – Antonioli, J., & Malde, J. (2023)
The Biden administration has proposed some cuts in Medicare spending…But these savings amount to just $24 billion a year over the next decade: clearly inadequate, considering that Medicare spending is projected to increase an average of nearly $100 billion a year over the same period. What else can be done to rein in those costs?
Per the Kaiser Family Foundation: In 2021, Medicare spending comprised 13% of the federal budget and 21% of national health care spending. Medicare spending per person has also grown, increasing from $5,800 to $15,700 between 2000 and 2022 – or 4.6% average annual growth over the 22-year period. Looking to the future, net Medicare outlays are projected to increase from $744 billion in 2022 to nearly $1.7 trillion in 2033, due to growth in the Medicare population and increases in health care costs. Where is all that money going?
The California legislature recently passed Assembly Bill (AB) 2098, which would “designate the dissemination of misinformation or disinformation related to the SARS-CoV-2 coronavirus, or ‘COVID-19’ as unprofessional conduct”. AB2098 has been signed by the governor and is scheduled to take effect on January 1, 2023. Here are some excerpts from the new law…
Per the above chart, around 76% of the extra healthcare spending goes to inpatient and outpatient services, which mostly boils down to hospitals and physicians. US Hospitals are expensive because most have near-monopoly pricing power. And US physicians are expensive because they have supply-based pricing power. Check it out…
A lot of people think healthy food is expensive and so either give up on the whole concept or take a bunch of vitamins and supplements and call it a day. Thing is, healthy food is not expensive. And by “healthy” I don’t mean organic or available only at the local farmers’ market. I mean at the very least 7 servings of fruit and vegetables, plus protein and carbohydrates. Some fresh produce is nice, but canned and frozen stuff will do too, nutritionally speaking. Like in this USDA table:
Per the above table, states that prohibited vaccination mandates had a much higher Covid mortality rate from July 2021 to March 2022 than states without bans. The difference in mortality rates doesn’t appear linked to state-level prevalence of obesity or diabetes. Adult vaccination rates were somewhat higher in states without mandate bans, but the vaccination differences aren’t that great. Plus, it’s hard to disentangle the effects of mandate bans and popular resistance to getting vaccinated. One thing is clear, however…
Ok, the Covid mortality rate for states without a mask mandate was almost twice as high as for states with a mandate. Simple cause-and-effect? Unlikely, although mask mandates probably played a role. But that’s just my opinion, not a result of hard-core research and not taking into account possible confounders, like the people’s compliance with state mandates and social distancing recommendations.
Experts are fallible. Experts often disagree with each other. How, then, does one go about trusting experts? And how do we figure out which experts to trust, or not? Take, for instance, medical doctors…
Which got me to thinking…If all households were provided free home test-kits, without having to request them, and were advised to test themselves whenever they had symptoms or had been exposed to infected individuals…wouldn’t that alone slash Covid case rates? Add in better treatments, and I wouldn’t be surprised if Covid case and mortality rates quickly dropped to flu-like levels. My reasoning is as follows…
The US currently spends about $4 trillion on healthcare (splitting the difference between 2019 and 2020). To get to Switzerland, we’d need to get that down to under $3 trillion a year. That’s a tall order.
Any way you look at it, the US spends way more on healthcare than other developed countries, both as a share of GDP and on a per capita basis. So why are these other countries’ health outcomes so much better than ours?
Why do so many Covid deaths go unreported? One reason is that most people die at home in developing countries and out-of-hospital deaths are rarely medically certified. For example, only around a fifth of all deaths are medically certified in India. Even in countries with substantial hospital data, cause-of-death is often misclassified, often a result of insufficient physician training. Sometimes, though, misclassification is deliberate, as in some hospitals in India, where officials have directed doctors to list cause-of-death as “sickness” and not Covid, possibly to avoid a panic. And then there’s Russia…
I’m going to assume an annual budget of $2 trillion (inflation-adjusted) of additional federal spending to tackle five problem areas: healthcare, poverty, social mobility, housing, and threats to the biosphere. Let’s start with healthcare. The challenge is to come up with a high-quality, affordable universal healthcare system that doesn’t eat up my budget. Easy - the The Urban Institute has done most of the work already…Per the Urban Institute’s analysis, just $108 Billion in additional revenue is needed for their proposed reform: a drop in the $2 trillion bucket. But even this reform option leaves a lot of waste in the US healthcare system.