This describes the biggest problem in US healthcare. No clear and consistent pricing. If we had a real market, you would get a prescription and then go to the seller with the lowest price. And everybody would get the same price. This whole business with PBMs that are owned by the insurance companies, discount cards and other shenanigans just invites corruption.
The system is fundamentally broken.
I go to the doctor and I have zero clue what will come back on the bills.
It took me two weeks, dozens of phone calls, and multiple "escalations" to learn what would be covered and what the price would be if it wasn't
Totally insane. The kicker is that after all that, the price I was billed wasn't even the price I was given (thankfully it was less though).
Also I went in for a colonoscopy and an endoscopy. Insurance was billed for $14000. I got statements from 4 different doctors, and the facility where it was performed. None of the statements matched the explanation of benefits from the insurance company. And when I called each doctor, to pay them, they all told me that I didn't actually have to pay them what it said I owed. So I just ended up paying $2500 to the insurance company. It again, makes zero sense.
I’m reaching the point where I don’t really care if it’s private or public, but what we are doing today is the worst of both worlds. It either needs to be fully private, maybe with mandatory insurance purchase, or it needs to be fully public, though that has its own baggage.
I bet whatever cost these patients cause, the hospital will inflate this by an order of magnitude. It’s the same with charity care. Hey, my sticker price for an aspirin is $1000. I’ll give away 10 aspirin and I can get credit for $10000 charity.
OH YES THEY ABSOLUTELY DO!
When I was in-between jobs I had a medical emergency and I was on the ACA around the first year it was offered. I was billed above medicare rates so I was on the hook for ~40k after out of pocket max. They told me this limit is what insurance has to cover but hospitals can still bill above it. First they told me they could work on the prices and asked for my last 5 years tax returns. When they saw that I had dividend payments they said they couldn't help me and I owed them the $40k. I think that was the problem because even though I wasn't working in their mind if I had investments then technically I was not in need so they set up four-year payment plan and paid every penny with no cost reduction.
I probably did something wrong but to this day I didn't know what I would have done differently. The only people I could talk to were the hospital and they only cared about the hospital.
Maybe you just don't have any assets or make very little money. I have equity and cannot just toss it to a collection agency and hope they forget. I also play by the rules, silly, I know, but I don't want to risk getting fucked some other way later in life.
They couldn’t answer if cholesterol test would count. How is that not automatically classified as preventative? It’s one of the most basic metrics.
So they want me to get the doctor to give me the ICD code and the diagnosis code. Or something. Two different codes. They’ve added so much bureaucracy and crap into the system because they can. Nobody’s stopping them and there’s too many fingers in the pie.
They're incentivized to classify whatever they can as not being their problem, so it makes sense for them to double-check everything - there is always a possibility that some edge case was found that lets them off the hook for some specific test or treatment. Moreover, obscuring information and spreading support staff as thinly as possible means that extra barriers heavily discourage people from fully knowing what they'll be on the hook for, which makes them more likely to just nod their heads and do/pay what is asked. These decisions aren't driven by medical concerns. It's a universal problem of nearly all kinds of privatized insurance - their core incentive is to ask for as much money as possible and provide as little in return as it's legally feasible. All the things mentioned in this comment thread are used to thwart any possibility of competition, which would otherwise act against this strong pull towards pure profit-seeking.
The place where I live is often used by Americans as the first line of defense to justify their healthcare system. Among certain political circles, there is almost a reflex to point at us and say "see how terrible it is?!" by exaggerating all the drawbacks and minimizing all the upsides. Yet even in such a flawed, underfunded, mismanaged system, my government insurance plan covers all "medically necessary" lab testing, with a couple rare exceptions that are only covered if you're diagnosed with certain conditions. The process of getting a test consists of a doctor filling out a standardized sheet, then going to a lab and handing them that sheet and my regional insurance card. No money exchanged.
It's hard to say that it isn't racketeering at this point.
"Specifically, a racket was defined by this coinage as being a service that calls forth its own demand, and would not have been needed otherwise."
There's demand for the meds, but the demand for discount cards, forcing people to use specific services/companies, and related programs is all invented by the companies themselves.
For example, this place does it:
https://surgerycenterok.com/surgery-prices/
Insurance companies do not force the sellers to use complex billing practices, they would benefit from more transparent pricing (since they are seeking to pay less).
The root cause is healthcare is inherently complicated and complex, it has a problem of supply being nowhere near demand, and since prices for things are so high (including liability), there is a lot of cover your ass and fraud prevention going on.
I even provided an example of a healthcare provider choosing to be more transparent. It is always Eli Lilly’s choice to sell their medicine at a flat price to everyone. But it is also in Eli Lilly’s benefit to engage in price discrimination, so that they get paid more by people who can pay more:
https://en.wikipedia.org/wiki/Price_discrimination
Another example of this was when I was in college, US textbooks cost multiple times more than the international version of the textbook I could buy on Abe books or whatever website. Or, coupons for grocery stores. The insurance company has no hand in this.
To be clear, insurance companies also cause waste, because the government does not audit them, and the insurance companies are not staffed appropriately to resolve disputes in a timely manner.
Get rid of the patents and this will solve itself in no time.
> The insurance company has no hand in this.
False. Insurance companies in the US own stock in big pharma firms like Pfizer, Johnson & Johnson, Eli Lilly, etc. They maintain substantial investment portfolios and generate returns on premiums and reserves. They also have voting rights as institutional investors.
> False. Insurance companies in the US own stock in big pharma firms like Pfizer, Johnson & Johnson, Eli Lilly, etc. They maintain substantial investment portfolios and generate returns on premiums and reserves. They also have voting rights as institutional investors.
This is a wild assertion. The sum total of all 7 publicly listed insurance companies’ market caps is less than Eli Lilly, just one pharmaceutical company. I would need some evidence before believing that health insurance company leaders have any influence on pharmaceutical companies.
I would also be surprised to learn insurance companies hold specific stocks, seems like a risk insurance companies would not take, especially ones that have lots of routine cash expenses. They spend ~85% of their premiums on medical expenses, and probably at least 5% to 10% on their own staff, so they shouldn’t even have much extra cash left to invest for the long term.
https://www.oliverwyman.com/our-expertise/insights/2023/mar/...
Edit: hit posting limit, so to respond to comment below about net income, that Yale link does not seem relevant as it is for all healthcare companies. All 7 publicly listed insurers’ combined annual net income is $35B or less for the previous 20 years, at a profit margin of 3% or less, which is peanuts. The pharmaceutical companies earn much more money than them, which is why the pharmaceutical companies have higher market caps.
> Why are we using market cap as a metric ? Look at investment value.
Because a company that owns influential portions of another company would have that reflected in their market cap. Like Berkshire Hathaway does. with the exception of UNH (due to its healthcare provider business), the other insurance companies are relatively tiny businesses compared to pharmaceutical companies and so cannot be holding any influential amount of stock.
Why are we using market cap as a metric ? Look at investment value.
From the NAIC report at https://content.naic.org/sites/default/files/capital-markets..., common stock holdings alone of U.S. insurance industry is roughly ~$1.2 trillion.
"Over the past 20 years, health care companies spent 95% of their net income on shareholder payouts, totaling up to $2.6 trillion, according to the research findings. Shareholder payouts also tripled over this period - a trend largely shaped by a few powerful pharmaceutical companies, the research team noted."
https://medicine.yale.edu/news-article/health-care-company-p...
COVID mRNA vaccines (Pfizer-BioNTech, Moderna) got billions in public funding. Yet, patents usually belong to the private company and prices are not capped as a condition of public funding. It is gross corruption begging for heads to be put on pikes.
But instead, people rail at health insurance companies and pharmaceutical companies and others who can’t or won’t make a difference.
Because this is the Corrupt Evil Nexus that continues to ensure that taxpayer funds and exclusive patents keep flowing to them, while keeping prices high. They buy political power via campaign financing by the bucketload and the congressman/woman changes their vote to kill/oppose bills that would make a difference. You can find dozens of examples. Do your own research. As an example, take a look at the voting for the bill to permit Medicare to negotiate drug prices. Look at who received bribes and from whom to vote "No".
(Although it is, of course, true that having special drug rates for Medicare trends against rather than towards "clear and consistent pricing".)
More specifically, the stronger acts which were killed by Big Pharma bribes would have
- Tied U.S. prices to international reference pricing (e.g., prices paid in Europe)
- Broad Medicare negotiation for many high-cost drugs - including dozens of new drugs.
- Applied negotiated prices beyond Medicare in the commercial market. (Private Insurance too!)
- Imposed strong penalties on drug companies that refused to comply
- Generated large federal savings. Also would have had faster rollout. Remember IRA pricing is YET to come into effect.
PS: Look at the Senators who diluted drug-pricing in BBB even further to a bad JOKE. (lol at price reduction for 10 drugs in 2026). Look at whom they received bribes oops..donations from.
I mean, I think a lot of the incentives behind textbook pricing in the US are honestly not that dissimilar to the ones in healthcare. I know Pearson is particularly egregious for price gouging students because they have exclusive deals with schools to provide the textbook for some specific class or subject. They raise prices because f*ck it why not, they won’t get pushback, which is not a valid reason to do so in most other countries.
They can use the rebates they get from the providers to subsidize the insured, allowing them to offer lower premiums and gain market share. This is what people mean when they say "In America, the sick people pay to subsidize the health care of the healthy people".
Of course, that above only applies if there is competitive pressure. If there is no competitive pressure (e.g. in states with only one or two insurers), they can keep premiums high and book as profit the difference between what the patient paid out and what the patient would have paid out in a lower-cost no-rebate world.
This sounds like typical negotiating 101. You know you are going to be forced to lower from your starting position, so increase your starting position so when you do negotiate down you are closer to where you wanted to be.
Insanely comical.
Some experts report that PBMs overcharge for generics; The Wall Street Journal estimated that Cigna and CVS Health, both of which own PBM services, are able to charge prices for specialty generic drugs that are 24 times higher than what manufacturers charge.
https://www.americanprogress.org/article/5-things-to-know-ab...
For anyone not in the US wondering if this is an exaggeration, here is my history of buying prescription drugs.
1. For years, when I had insurance through my employer, I'd go the the nearest in-network pharmacy, which was Rite-Aid, for them. Those insurance plans always had a copay which was typically $10-15.
It was this way across several different insurance providers I had over the years at that employer. (For non-Americans wondering why my insurance company changed so often, it is common for employers to frequently switch providers to try to save money. Besides that being annoying because it means frequently changing coverage limits, it also means frequent changes in what doctors and dentists are in-network).
2. I saw something about Walmart's generic drug program. They were selling many generic drugs for a cash price of $4 for a month supply and $10 for a 3 month supply. Most of my drugs were included, so for those I switched my prescriptions to Walmart and didn't use insurance.
3. Later, for my drugs not in Walmart's generic drug program, I found that the GoodRx app or website could usually provide a discount coupon that would bring the cash price with coupon down below my insurance copay.
The GoodRx discount could vary significantly from pharmacy to pharmacy so I had my prescriptions split across two pharmacies.
4. My employer downsized and could no longer afford to provide insurance. I switched to a plan purchased on my state's Affordable Care Act (ACA) marketplace. I made too much money to get a government subsidy on my premiums, but not enough to afford a marketplace plan in the top two of the three tiers of plans (gold and silver). I had to settle for the third tier, bronze. That basically meant bigger copays and/or bigger coinsurance on everything, including drugs, than I had when I was on plans through my employer. Walmart generics + GoodRx coupons continued to be how I bought drugs.
5. I eventually switched to an HMO plan from the ACA marketplace, when rising costs made it so even the bronze non-HMO plans were too expensive. This meant I had to switch doctors to one that worked for the HMO (Kaiser), and the only in-network pharmacy was the one from the HMO.
It remained cheaper for nearly everything to continue with Walmart and GoodRx. The only drug I regularly got through Kaiser's pharmacy was generic Lipitor. That was $0. I refilled one of my other prescripts at Kaiser once, and my out of pocket came to twice what that drug was at Safeway with a GoodRx coupon.
I didn't try any of the others through Kaiser because there was no way that I could find to get the price other than actually getting the prescription filled there. Even though it was a Kaiser pharmacy, which is located in a Kaiser building and only takes Kaiser plans (and maybe people paying cash), they have no way apparently to answer the hypothetical "If I get drug X and I have Kaiser plan Y and my ID number is 12345678, what will my out of pocket cost be?".
I would have expected that one of the benefits of an integrated system like Kaiser where it is one company basically providing all of your health care except for some special services they contract out for would be that they could tell you the damn costs. I would have expected that when I'm in the doctor's office and he gives me a new prescription that on his terminal it would have the cost of getting it filled in the Kaiser pharmacy that is in the same building.
Nope. So I'd have to waste his time and mine getting out my phone, looking up the drug he's about to prescribe in the GoodRx app, and then decide where I want it. A nice thing about the GoodRx app was for Walmart if they did not have a GoodRx coupon because the drug was in Walmart's generic program GoodRx would still include it in the listing, showing the cash price so I didn't have to separately check Walmart's generics list.
6. It does get better when you get older. When I turned 65 and switched from a marketplace plan to Medicare I had to choose an insurance company that offered a Medicare drug plan. You can enter all your prescriptions on Medicare.gov and you can enter 5 pharmacies and the listing of available plans in your area will show you the annual total (premiums plug drugs) for each plan for both getting your drugs at the cheapest pharmacies on your pharmacy list and for getting them via mail order. By default it sorts the list by lowest total.
You still have the hassle of plans possibly changing each year. My plan on my first year went away. It was a $0 premium and $0 for all my drugs. There is still a $0 premium and $0 for all my drugs plan available for 2026, but I'll have to change pharmacies to one less convenient.
The above is if you choose regular Medicare when you enroll in Medicare. You can instead choose Medicare Advantage. The way Medicare Advantage works is instead of providing your medical coverage itself Medicare pays a private insurance company to do it. The plans offered by those private insurance companies broadly look a lot like the marketplace plans that offer on the ACA marketplaces or the plans they offer through employers.
They are usually pretty cheap, often with no premium from the insurance company (although you still have to pay a premium to the government for Medicare). Some even have negative premium plans. They also have most of the annoyances of ACA marketplace and employer plans, but there are usually ones that include drug coverage similar to the part D plan coverage for people on regular Medicare.
ref- The Billion Dollar Molecule
Isn’t this any capital-intensive business with variable demand?
https://www.healthsystemtracker.org/brief/how-medicare-negot...
This is satire btw.
Drug maker thinking
Foreigners aren't the reason American healthcare sucks. Stop looking for people to blame abroad, all the sources of your problems are in the presidency, congress, and in the boardroom that directs the former.
The European pharma companies are doing more than fine, despite their main market being heavily regulated and price-controlled.
The less charitable explanation is that US companies want to charge outrageous prices, and the American system let them to, so they do it.
That's what the USA are: a machine to prioritize profits over people. Sometimes it turns out fine, like for the startup scene. Sometimes it's terrible, like when lives at stake.
Other explanations sound like heavy copium to me.
- Doesn't make them non viable without the American market, just less rich.
- Doesn't reflect the 5 to 10 times higher price Americans pay for the same drugs.
You can have a healthy industries with plenty of billions to be around and have decently priced drugs.
What you get in the US is uber profitable industries and people scrapping around.
> Reversing the subsidies for things like car-dependency would positively benefit millions of people but it’s a generational change, not something most individuals can do.
Individuals frequently can chose to not use a car, of course. Still, it's not realistic for everyone or all the time, especially in a society built for automobile use.
> by the time people are confronted with the health impacts of cars, agriculture subsidies, for-profit healthcare, etc. it is likely that drugs will be necessary
My point is that there are other treatments for illness. I doubt it's a coincidence that this patentable technology is so relied on in a hyper-capitalist society; other countries with better health outcomes use far fewer pills, iirc. Who will fund the large-scale study that says a valuable pill is unnecessary?
Turns out all the low hanging fruit have already been picked, so the only "more efficient ones" left are stuff like gene therapy, which are absurdly expensive, but still theoretically cheaper than a lifetime of care. Unsurprisingly the high sticker price draws much backlash from the public and politicians.
What is that based on?
Also, I'm not talking about 'low hanging fruit' necessarily; only solutons that become cost effective for vendors if drug prices aren't so extreme.
There's reason to think there is low-hanging fruit: Research is incentivized for the most profitable solutions for the vendors, not the most cost-effective solutions for patients.
>There's reason to think there is low-hanging fruit: Research is incentivized for the most profitable solutions for the vendors, not the most cost-effective solutions for patients.
High drug prices also mean you can charge more for one-off cures. See, the gene therapy example above.
Healthcare, like real estate, is a dysfunctional marketplace lacking real competition
This is a trope among populists: pass legislation around <thing>, observe consequences of doing so, blame the "free market", repeat.
A look at how European governments negotiate with pharma companies helps explain why Americans pay more for prescription drugs.
https://news.stanford.edu/stories/2024/11/what-other-countri...
You could just say "Americans need to vote better and cleanup their laws around this" and yes, that would be ideal, but I don't see that happening anytime soon. It's part of why some want the government to not involve themselves at all: no matter how good the politicians you elect, others can come into office and fuck it all up while everyone is forced to deal with it because they have the monopoly on violence. Not to mention the glacial pace at which our legislative bodies move.
I can think of a number of things.
The article is about drug pricing, which is the part I found interesting (and by extension thought we’d find interesting). I thought taking it out both saved space and made the comments less likely to veer into flamebait.
I'm sure Trump pressure will soon bring those 1000% savings on pharmaceuticals, just hold on.
Few days ago, Donald Trump pressured Emmanuel Macron to raise the prices of all medicines. The pressure was made with unspoken threats according to several mainstream French media such as this one [1].
[1]: https://www.tf1info.fr/international/trump-se-vante-d-avoir-...
Furthermore how Macron can increase prices of drugs? I was thinking that Americans are all about free market.
If given two options, they will take the one that will hurt more people, every day of the week.
It would end inflation within 90 days
Even their silly 15% tariff fallback law abuse would be more sane than the 50-150% currently
Next few years is going to be insanity
The lesson has been learned by this point though, even a day laborer is holding silver and crypto nowadays because we have in recent memory the COVID shenanigans of mass QE.
People in China and Russia have basically taken for granted so long that their currency is completely manipulated, they all already knew to not be hoodwinked.
Liberals vehemently opposed the idea, calling it 'regressive', meaning it would be socially backwards, but the idea held appeal as a simple and fair way of "taxing everyone equally". For some reason, a majority of public opinion leaned left on this particular idea, and it never gained a foothold.
When I learned of the blanket tariffs being imposed on everything imported into the US, I think I knew what I was seeing-- this was a National Sales Tax in disguise. This was an attempt to fund the federal government off the backs of people, who will at the very least pay 10% more for everything they buy.
The big lie was told-- that this was an emergency necessary correction for an ongoing American-life-threatening international trade imbalance. But the real lie was bald-faced, right there in front of us-- everybody was going to have to pay more for everything, because this was, and is, a new tax.
I think there's a slim chance the Supreme Court may not even issue a decision addressing the legality of the president's impertnent array of tariffs. Although two full months have passed since oral arguments were made before the court, we may have an even longer wait for a decision, because it sure looks like John Roberts and company can't find/manufacture a reason to uphold/allow the president's seizure of tariff power.
They have demonstrated a preference for empowering the president. The court's character is displayed with quick mute indecipherable decisions from the shadow docket, while unpopular new anti-precedents get leaked ahead of release, delayed until opinion can be spun. So I would not be surprised to see the decision delayed, maybe even all the way to next October.
However it turns out, I'll pay the price and take my medicine, and try to be happy.