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Health care costs ...Too much GOVT is the problem.
I would argue that the problem is bad government rather than too much.
If we completely got government out of health care and let the transnational corporations run everything how they see fit, knowing that profits, not lives, are what motivates the executives of these corporations, do you honestly believe that health care prices will go down?
Don't just answer that question right away. Think about it. Think about what corporations, particularly large and powerful ones, actually do when unrestricted by law.
A very flawed analysis by the OP. No mention of high-tech medical toys, oops, I mean DEVICES, that are one of the main drivers of insane inflation of medical care costs.
That's good ol' capitalism, complete with patents that protect the inventor. How does government get in the way of that sort of private market activity? They don't, and it doesn't work. 46 million uninsured people will tell you that.
I also detect more than a sniff of class-based contempt for the less fortunate in the OP's analysis. Does your employer provide you with health care coverage? I hope so, as it's killing the rest of us barely making the monthly premiums with their double-digit yearly increases. That's good ol' capitalism as well, juice it to the captive consumer whenever possible.
No, you have backwards, we need to get the private market bloodsuckers OUT of the healthcare industry and get the administrative costs down from 15 -30 % to more like the Social Security Administration, which manages just fine with a 3% overhead.
Are you f** crazy. you are googling all over the place to get some crappy data. talk to someone who has lived in india and you will know how indian health care works
Are you the person who has lived in India? If you are then you should have no trouble at all refuting my numbers. Sorry I don't do anecdotal. Please feel free to provide some official numbers that dispute my crappy data. Until then I will stand on my hand.
yes , i was born and raised in India and i know the system in and out.
I know how much it costs for medical care in india. even normalizing it to US per capita income, the costs here are "ridiculous".
don't you all agree that the costs are just absolutely insane in US ?
does anybody have an answer why ? I have put four points which are possible reasons with different degrees of effect.
Well then you should have no trouble at all providing correct numbers since mine are incorrect, when can I expect to see them?
Yes the costs are ridiculous. I'm waiting to see your theoretical free market in action. India isn't anywhere close. It's cheap because it's so poor a large number of people simply don't have health care at all. Show me a comparable to the US health care system operating as a free market, I'll be glad to look.
The rest of the first world uses government public health care with better results and half the cost. So simply saying government is the problem doesn't make much sense. Corporate ownership of the political system of the US is the problem. Not just in health care either.
There are 3 very simple reasons why health care in the US is expensive. Fee for service, insurance billings for fee for service, and drug patents. If the US used capitation for general medicine and salary for specialists like everyone else then the costs would be the same as everyone else. That would also mean the enormous cost of insurance and insurance billings were eliminated. If drug companies weren't able to continually repatent existing medications, keeping generics off the market, then the cost for drugs would be a fraction of what it is now.
Government involvement magnifies these problems but is not the cause. If you actually bothered to read some of what was posted you would discover that health insurance and fee for service were common before insurance was tax deductable and well before medicare existed. You have your causation backwards. The problems were there, then government got involved and made it worse.
Your blood can boil as much as you want it's never going to change. Doing so would also mean the huge bribes, whoops sorry expressions of free speech, going to politicians from insurance companies, pharma, and the AMA would go away. Never, never ever going to happen. So everyone is just plain old screwed. I think I'll just continue to be an expat.
Hi Bob,
I agree with some of your statements. But both you and me are not right on the free market concept since we both don't know "exactly" how it will work.
but we could definitely start with small steps in the right direction and fix things which we all agree are broken. getting as close as possible to the free market without messing it up is one such step. there is no perfect answer here.
So you have no basis for thinking a free market would work, you just want to give it a go. Why not give a go to a system that we do know works and that we also know supplies better results at less cost? How about that for an idea?
I noticed you tossed in that old chestnut of supply constraint. I take it that waiting a little while longer is unacceptable but having 50m lacking coverage isn't. Everything has constraints. It's how you manage them for the good of the whole. If you want to go the private route and get faster care, then you aren't prevented from doing that under the universal healthcare systems.
If you want to go the private route and get faster care, then you aren't prevented from doing that under the universal healthcare systems.
The current private route will still have all the issues i highlighted in my OP.
That's the private route in the US not in the other healthcare systems. And there's nothing wrong with the universal healthcare systems as demonstrated by the WHO report.
That's the private route in the US not in the other healthcare systems.
how do you fix the private route in US ?
looks like we are looking for bandages not solutions to the real problem.
Good grief. You minimize its role and influence by adopting an effective universal healthcare system, many of which have demonstrably better results than the current US system. That leaves a minimal role for private healthcare for those who wish to take that route. How that is implemented is unimportant because EVERYONE will still be able to get good healthcare.
Good grief. You minimize its role and influence by adopting an effective universal healthcare system, many of which have demonstrably better results than the current US system. That leaves a minimal role for private healthcare for those who wish to take that route. How that is implemented is unimportant because EVERYONE will still be able to get good healthcare.
So you don't give a damn about people who might lose their life because the line is too long and the private route is unaffordable.
universal health care will only move us from worse to slightly less worse but it still won't fix the fundamental problems.
What bullshit. You are the one who doesn't give a damn about 50m uninsured people in the US. The healthcare systems of many countries are considerably better than the US system and for considerably less cost. Your suggestion of a completely free market route is utterly laughable and yet here you are talking to me about not caring about someone losing their life because the line might be too long. How many people will lose their lives under your ridiculous free market approach because they simply can't get into the line in the first place?
When did i say that i am ok with 50m uninsured ? and when did i say the current system is free market ?
You are assuming that i am justifying the current system which i am not.
Did you even read my original post ? the whole post is about why the current system is so broke
Oh right, charities are going to come in and build a completely new healthcare system for those 50m people. Ha, ha, ha.
And no, I don't think you are justifying the current system. You have been arguing for a completely free market for healthcare, which would be even worse.
50 million people are uninsured because they cannot "AFFORD" it.
the goal should be to reduce the cost of healthcare so that it becomes affordable to almost all of the 50 million people. There will still be small % of people who will never be able to afford healthcare..thats where the govt or charity hospitals come.
That is one of the most ridiculous things I've ever heard. On what planet do you think you are going to be able to reduce healthcare costs in the US to the point where people who can't currently afford monthly insurance premiums will suddenly be able to find the cash for even minor medical treatment let alone common invasive procedures? And what about major surgery? This isn't a small percentage of people. This will be the 50m people that currently can't afford it + the huge number of people who also don't have access to a vast pile of cash that would be needed to pay for any procedure under your bizarro free market idea. It's just a nonsense. And which is it, charity or government? And if it is government, why is it good enough for this large number of people but not good enough for everyone else? As for the idea that charitable organisations would step in, you can only shake your head in disbelief at that idea.
The only place you will see that is in laser eye treatments. The lasik treatment prices dropped significantly over time due to this reason. its not covered in insurance and people shop for cheapest and best option.You see companies advertising the "PRICE" of the lasik in media. How many times have you seen that for regular test/scans..etc ?
But Lasik is a perfect example of ADDING to health care inflation. You didn't do the math. You don't seem to grasp the cost PER lasik has gone down, the cost OF lasik has skyrocketed. Some insurance does cover lasik.
First there was no lasik so it cost nothing, then lasik was new and expensive and few people got it so cost almost nothing, now lasik is very popular and there are something like a million a year at 4k a pop. So lasik is adding 4 billion a year of pure inflation to health care spending that didn't exist in 1991 (actually about 2000). Multiply that out by all the new procedures and treatments in the last 40 years and I would think you have answered a big part of your own question about medical inflation.
BTW, your 1991 number isn't valid anyway. From 1991 to 1998 lasik was limited clinical trials with experimental lasers. I know this because my girl friend at the time had lasik and they made a really big deal about it being experimental. The first production laser for lasik was 1999 so you really need to compare price points after that. Makes for a more dramatic chart, but try to stick with apples vs apples. As Mark Twain said "There are three kinds of lies. Lies, damn lies, and statistics".
So how many tests/scans did you research the cost history of that you know the price hasn't gone down on any of them?
If the govt. was completely out of health care any medical procedure cost would not be more than a dozen eggs & the quality of care would surpass perfection. Go Free Enterprise!
the first world uses government public health care
OK, yes we need expanded public health, because government provides most of the high risk care already. Government provide MediCare, MedicAid, and VA health services. So the government takes the highest risk patients, and leaves the cream for private health insurance.
Health care in United States is run by, and for the very rich.
The break down in our system starts with education. To be a doctor is extremely expensive here. The cost of education is in the area of $500K to start. In India there are more, and better educated doctors. Do all of the doctors in India pay for that education?
Last, but not least we look at being a doctor, or the medical industry as a path to wealth. Drug companies, medical devices, patents, procedures, and copyright are all sure fired ways to make a million. Isn't that a little sick when you think about it?
All those innovations for profit rather than a greater good is the root of the problem we have here.
You don't seem to grasp that inflation = cost PER LASIK (not of all the money we are spending on all the LASIK's)
I am surprised that you have been debating about medical inflation on this board for so many months and you don't even know the concept of inflation
You are correct, I meant to talk about costs, not inflation. Mental error.
Yes I know how medical inflation is calculated by BLS. I don't agree with it, even BLS admits it's inaccurate. They only track out of pocket expenses net of reimbursements but not employee provided health care. Out of pocket is far higher than what insurance companies pay and very few people pay out of pocket. I do agree with the BLS that coming up with a true number would be impossible. It's more than ordinary inflation (which doesn't include housing and energy) but no one knows how much.
So where is the money going? Doctors real net income has been falling for 20 years. Insurance profits are way up, Drug company profits are way up. Hospital profits are way, way up.
So what is your actual solution other than saying we need a free market? Very nice, it's like saying we need world peace. Should we make insurance illegal? Nationalize the drug companies and hospitals? What would be an actual plan to create this utopia? I'm still waiting for you to point out a working example of free market health care to emulate. India certainly ain't it.
In India there are more, and better educated doctors. Do all of the doctors in India pay for that education?
Could you provide proof doctors are better educated in India? That should be interesting to read.
I don't know much about medical education in India, but I do know that eastern european medical schools have been flooded with students from india the last 10-15 years, so it can't be all be sweetness and light.
I do know that eastern european medical schools have been flooded with students from india the last 10-15 years, so it can't be all be sweetness and light.
Transferrable credits might be a reason.
http://www.foreignpolicy.com/articles/2010/06/11/countries_without_doctors
Could you provide proof doctors are better educated in India?
Here in the United States we have an academic way of educating our doctors, when in most Third World countries doctors do hands on traing, including cleaning bed pans.
The need is so great, in most countries, for medical care, health care, that every one is required to help.
In my opinion, it makes for better doctors.
Did I phrase that better?
Here in the United States we have an academic way of educating our doctors, when in most Third World countries doctors do hands on traing, including cleaning bed pans.
The need is so great, in most countries, for medical care, health care, that every one is required to help.
In my opinion, it makes for better doctors.
Did I phrase that better?
Better phrased but not true, Medical training is pretty much the same around the world. Almost everyone uses the same curriculum, The only difference is the US does a 4 year bachelor degree then 4 year medical school. Almost everyone else uses the British system of 6 years medical school right after high school. The US system has 2 years classroom, 2 years clinical, with a 3 year residency. The British system is 2-4 years of classroom then 2-4 years of clinical usually with a 1 year internship, although many systems use the 6th year of medical school as internship. Any specialist training is in addition to that. No one would waste expensive highly trained peoples time cleaning bedpans. Even the poorest third world country has nurses. Here's a pretty good summary from wikipedia. http://en.wikipedia.org/wiki/Medical_school
Have you ever actually travelled in the third world?
Transferrable credits might be a reason.
http://www.foreignpolicy.com/articles/2010/06/11/countries_without_doctors
Did you actually read it? I couldn't it's subscription only. The only part I could read says the US has 13 doctors per 1000 people which is totally fiction. The true number is 2.5 which is slightly below average for the oecd, but the US has more gp's per 1000 people than the oecd average and a better ratio of gp's to specialists than the oecd average. If the rest of the article is that bad I really don't want to bother thank you. Sounds more like a political hack piece than anything worthwhile.
Here's a pretty good summary from wikipedia.
Here's wiki link that shows the number of doctors from India in 2005. http://en.wikipedia.org/wiki/American_Association_of_Physicians_of_Indian_Origin As I understand it the per cent has gone up.
Medical training is pretty much the same around the world.
Here in the United States it cost $500K to be a doctor, or there abouts, from what I understand.
That's a lot of student debt unless mom, and dad pay for schooling. To get into Harvard you need to have the very best of everything which in my opinion means wealth.
In other parts of the world the cost is less, $100K in India, and the requirements to get in, and get out of medical school require testing, aptitude, and ability.
Here in the United States it cost $500K to be a doctor, or there abouts, from what I understand.
That's just not true. Plenty of people go to state schools and state medical schools. My wife went to medical school at umdnj at 14k a year and umdnj is currently 25k a year. My sister in law went to medical school at Texas Tech in Lubbock (I think) for something like 6k a year and I don't think they charge a lot more now. She did undergrad at UT Galveston for something ridiculous like $70 a credit. That's like 13k for all four years. You can spend 500k if you want, but you can spend a lot less also. Most people spend in the 200-300k range with undergrad, which is still a hell of a lot. Here, this is a list of every med school in the countries tuition. http://medical-schools.findthebest.com/ the vast majority are 20-40k a year tuition plus living expenses.
Curiosity overwhelmed me on this subject so I emailed a friend who graduated medical school in India and did residency in the US. He says that there are only 2500 slots a year in India state medical schools with 250,000 applicants and getting in is very corrupt. He went to a very good private medical school in Mumbai (apparently there are more than a few sketchy private medical schools) at a cost of 55k usd per year for 6 years. That's serious scratch in India even for a well off family like his.
Sumit also said that of the 30k or so med school graduates a year in India something like 3/4's go overseas because there are no residency slots or jobs after residency. So India is producing 7k domestic doctors a year for a country of 1 billion people. The US has around 20k med school grads a year for a country with 1/3 the population and they all stay here. No wonder India has only 1 doctor for every 2500 people.
Here in the United States it cost $500K to be a doctor, or there abouts, from what I understand.
cost of undergraduate + about 200-300K in medical school tuition + living costs.
Other factors not considered here is the loss of earning potential since it can take 7-12 years of training before you can actually start working and earning money.
about 200-300K in medical school tuition
Most people spend in the 200-300k range with undergrad
OK, let's agree on $200K to $300K for medical school.
If the reports are true we have high medical costs because we have a lack of doctors, which also seems to be refuted here, then the government would be dollars ahead by granting a $1 Billion a year to medical students.
cost of undergraduate + about 200-300K in medical school tuition + living costs.
Other factors not considered here is the loss of earning potential since it can take 7-12 years of training before you can actually start working and earning money.
I don't understand the your math. Look at the chart. Out of 144 medical schools there are 30 are under 10k a year, 60 are under 20k, 103 are under 40k. Only 10 are over 50k, the highest is 60k. How do you come up with 200-300k a year medical school tuition? Even if everyone paid out of state tuition (most don't) it doesn't come up anywhere near that.
You have living costs no matter what. If you go to grad school (pretty much de rigour since a masters is now what a bachelors used to be) you have living expenses and loss of earning potential for 6 years of school.
Yes, it's expensive to become a doctor. It's expensive to become a doctor in many countries. But part the expense is undergrad which everyone needs any more (why you need a bachelors degree for most jobs is a different debate). A very, very small percentage are spending 500k and those that do usually have a reason. People aren't going to Harvard and Yale to look at kids runny noses and infected ears all day for a living. You can go to Texas Tech for that. The schools with prestigious reputations and prices are graduating people to be leaders in the field like high powered researchers or heads of departments.
The US system is 2 years longer than everyone else, but that's undergrad. Most of the first 2 years of college is "core requirements" like philosophy, history, and English composition which have no relevance to being a doctor. The British system doesn't bother with that bs which is why it takes 6 years everywhere else. Other countries figure that if doctors want to learn philosophy and history then they can do it on their own time rather than using up expensive education resources. There are 6 year programs in the US that are 2 years including summers of accelerated undergrad courses skipping the core curriculum crap then 4 years of medical school.
How do you come up with 200-300k a year medical school tuition?
That would be a total cost of medical school.
"Most" hospitals/private clinics are open 8 am to 9 pm ( including weekends)...just like all other stores.
So, what does that cost?
Doctors in India, or doctors from India, are brilliant and they are everywhere. What makes them so different?
Have you ever actually travelled in the third world?
Yes, I have, extensively. Students work to get through school, and some work in the hospital. Others are brought into the hospital to assist.
As far as the cost of medical school, it's expensive, long, and runs up huge debt. Opening a practice runs up huge debt, and that 2 years of philosophy are ususally business classes, because a doctor's going to need that.
I have long advocated for open borders for doctors, and government grants for students who have an aptitude for medicine. We would be dollars ahead.
The day Govt mandated emergency services to general public , it created a huge sink hole in the system.
Emergency room services are twice the price of our over inflated health care costs. The emergency room is no bargain for any one.
The emergency room treatment, and triage were mandated because of health care rationing that put many homeless in life or death situations. The emergency room is so we don't have people dying in the street.
The emergency room is a profit machine when it is well run, and many are.
I don't understand the your math. Look at the chart. Out of 144 medical schools there are 30 are under 10k a year, 60 are under 20k, 103 are under 40k. Only 10 are over 50k, the highest is 60k. How do you come up with 200-300k a year medical school tuition? Even if everyone paid out of state tuition (most don't) it doesn't come up anywhere near that.
Many are out of state BTW. You might want to check out these stats as these are the most accurate. I dont know where you get your info. I dont know ANYONE who paid less than 10k.
https://services.aamc.org/tsfreports/report.cfm?select_control=PUB&year_of_study=2013
https://services.aamc.org/tsfreports/report.cfm?select_control=PUB&year_of_study=2013
You have living costs no matter what. If you go to grad school (pretty much de rigour since a masters is now what a bachelors used to be) you have living expenses and loss of earning potential for 6 years of school.
Yup, those are costs, whether you go to med school or any other grad school. Regardless, it is a cost.
Yes, it's expensive to become a doctor. It's expensive to become a doctor in many countries.
In many other countries, this is all subsidized.
People aren't going to Harvard and Yale to look at kids runny noses and infected ears all day for a living. You can go to Texas Tech for that. The schools with prestigious reputations and prices are graduating people to be leaders in the field like high powered researchers or heads of departments.
Do you have any idea what you are talking about? Yes they are. BTW if you knew anything, you wouldnt think that only ivy league grads are in research or administrative positions and people from non-ivy league schools go into clinical practice. THis clearly shows your lack of knowledge in this subject matter.
The US system is 2 years longer than everyone else, but that's undergrad. Most of the first 2 years of college is "core requirements" like philosophy, history, and English composition which have no relevance to being a doctor.
Here are commonly core requirements:
General biology
Physics with lab
General chemistry (inorganic chemistry) with lab
Organic chemistry with lab
Calculus
English
Sociology
Psychology
What do you think is not needed or not relevant to being a doctor?
Many are out of state BTW. You might want to check out these stats as these are the most accurate. I dont know where you get your info. I dont know ANYONE who paid less than 10k.
Ok my numbers are from an out of date source and don't include fees, but the vast majority of the numbers on your chart are mid teens to mid 30's total, all fees included. That's still a far cry from 300k tuition for 4 years. Most people do in state. Entry requirements are about the same state to state so if there's a slot people go in state. Of my wife's medical school class less than 20% were out of state, that's not unusual in a state medical school.
The average debt for doctors is something like 190k last year, including undergrad. It's expensive, very expensive. I wrote the checks to medical school so I certainly know a lot better than you. But it's not anywhere near as expensive as some of the numbers being thrown out. Getting a advanced degree is expensive no matter what it is, which is my entire point that people seem to be missing.
The big expense for doctors that you don't get in any other field is the loss of earning power doing 4-7 years of near minimum wage residency after getting your degree while the interest on student loans piles up.
Do you have any idea what you are talking about? Yes they are. BTW if you knew anything, you wouldnt think that only ivy league grads are in research or administrative positions and people from non-ivy league schools go into clinical practice. THis clearly shows your lack of knowledge in this subject matter.
Where did I say "only" or "all", a large bit of assumption on your part. Most people that do so have a specific reason to go to a very expensive prestigious medical school over a state school. Sometimes it might be as simple as daddy will pay for it and I got in, usually it's a lot more goal orientated than that. They want to be top people and are willing to do whatever it takes. Very, very few Harvard/Stanford/Yale/etc. med grads are gp's for life in place like North Dakota or Kansas or Alabama. Many (a vast over representation based on percentages) become in time (obviously, they build up clinical experience first) top researchers, heads of departments at leading institutions, top level sub specialists, or leading academics who would not have reached their position by going to a podunk U state medical school. If you think this expanded explanation is still an inaccurate depiction of the situation then feel free to use your extensive knowledge of the subject matter to enlighten me.
What do you think is not needed or not relevant to being a doctor?
Core undergraduate courses from my university, University of Texas:
English Comp 2 semesters.
Humanities 2 semesters.
American Government.
American History.
Social Sciences: philosophy, geography, anthropology, etc.
Visual and Performing arts.
Undergraduate Studies. IE how to go to college.
That's almost 2 years of expensive study that is not required anywhere else in the world for people to become doctors. If you don't know how to read and write English you shouldn't be in college to start with. The rest have no relevance to a science degree. You certainly can read up on history or join a local theatre company if you are interested. But requiring spending 2-3 semesters of college on it, why?
Curiosity overwhelms me. What university did you go to that didn't have similar undergraduate requirements?
I wrote the checks to medical school so I certainly know a lot better than you
I actually went to medical school... so no, you do not know better than me.
Getting a advanced degree is expensive no matter what it is, which is my entire point that people seem to be missing.
No i got that point. My only point was that medical school is expensive. I made no comparisons to other advanced degrees.
Where did I say "only" or "all", a large bit of assumption on your part.
You implied it in your statement, otherwise why else would you even state it?
Very, very few Harvard/Stanford/Yale/etc. med grads are gp's for life in place like North Dakota or Kansas or Alabama. Many (a vast over representation based on percentages) become in time (obviously, they build up clinical experience first) top researchers, heads of departments at leading institutions, top level sub specialists, or leading academics who would not have reached their position by going to a podunk U state medical school.
Of course they dont go into GP in ND or Alabama. Why would anyone go to ND or Alabama unless they had some connection there. BUt that is not what you said. You said people who go into research or dept heads come from Harvard/Stanford/Yale. The truth is that a small percentage go into research or academics at all, regardless of where they went to med school. Sure the percentage may be slightly higher but to make a point of this is entirely pointless. BTW, majority of grads from these places end up going into primary care. BTW, you can easily get into academics, research, etc ,etc by going to a "podunk" U state medical school. Most people in medical school do not wish to go that route however if you wanted to, going to a top medical school is NOT necessary at all, as you imply.
What university did you go to that didn't have similar undergraduate requirements?
I listed requirements for medical school. You are listing undergraduate requirements for graduation. Are you not comparing apples to oranges?
I listed requirements for medical school. You are listing undergraduate requirements for graduation. Are you not comparing apples to oranges?
I was comparing why it's 6 years to become a doctor everywhere else compared to 8 years in the US. You have to graduate college to go to medical school so all the subjects are pre med requirements in the US system.
BTW, majority of grads from these places end up going into primary care.
And where to many end up eventually? I'm sure there are some Harvard law grads doing wills and divorce filings also. The biggest reason to go Ivy league is contacts and opportunities. No one going to an Ivy league school, undergrad or advanced degree, is unaware of that. I know plenty, they are very well aware of it. That's why they worked so damn hard to get there in the first place. Many do use it down the road.
Why do you keep putting words in my mouth. "all" "necessary" words never said or implied. No it is not necessary to have an ivy degree degree to become a researcher. But it will be a hell of a lot easier to become a big league highly funded leading edge researcher with one. You can become an Ibanker going to pudunk state, but it's a lot easier and you have a lot better chance with a Williams degree. That's the way the world goes round.
Plenty of people go to state schools and state medical schools.
When people talk about how the government can't do anything right, many point to education. You have made a strong argument here that the government does provide quality education, at a reduced cost.
So, my earlier comments were deleted by the worthy who started this thread and can't seem to argue his point: We are dead without government run and/or paid for health care. If you have employer-paid-for health care, bully. The rest of us not only don't, but there are 46 million people in this country without health care, and emergency rooms are not the place for it to start!
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Here is my take on the root cause of Healthcare cost in USA. I am focusing on costs because focusing on redistributing the costs ( which is mainstream media focus) does not fix the problem.
Fact : Healthcare cost is rising significantly faster than inflation in USA.
Reason : Given that health care is not a new industry and such a broad industry, the only reason for this divergence can be that its not a "FREE MARKET". In any free market, a broad established industry's "long term" inflation is always inline with rest of the economy.
Analysis : My whole analysis will be to focus on why its not a "FREE MARKET"
Divergence from free market happens primarily because GOVT comes in between consumer and services/goods provider. Generally, once the GOVT gets involved, a third party will use its lobbying power to influence the industry ( through GOVT) to its own advantage .
1) Insurance (GOVT SUBSIDIES and MANDATES) :
PROBLEM : GOVT + INSURANCE LOBBY:
Govt subsidizes health insurance ( In 1954 Congress codified this practice into the tax code ). This forced people to go through the insurance system because subsidies slowly destroyed cash driven non insurance based payments. NON catastrophic insurance is a flawed system because it makes everybody price insensitive. Since insurance pays the costs and is a pool system, nobody cares what the health industry is charging them.
imagine if insurance pays for your grocery store purchases.We will buy excessively things we don't need and waste everything.The grocery store charges will be excessive as well. There are some market forces at play here though. if the wastage goes up, insurance premium goes up and we chooses an insurance which has less premium.This creates motivation for insurance company to control costs.
But this cost control mechanism is not as efficient as free market though. its akin to soviet style centralized system versus free market capitalist system to control costs. insurance itself is a in-efficient system and should only be used for protection against catastrophic events where it serves an important function.In a free market , hospitals strive to have good reputation and offer services for low prices to attract consumers. The latter part is definitely not happening because the consumer is not price sensitive
Cosmetic surgery does not have insurance system and you can see the difference between regular industry versus cosmetic industry. The advancements in cosmetic surgery are at par with other areas of medical fields but at reduced cost because market forces are at work.
SAME WITH LASIK which is not covered in insurance.
2) GOVT PROTECTED Licensing of doctors and nurses and PROTECTIONISM:
PROBLEM = GOVT + DOCTORS/NURSES/DRUG lobby :
Licensing Doctors means that doctors need the permission of govt to provide their services. This system was not a big issue long time back when there was no globalization. As globalization started, most of the goods and services started to get cheap. Goods got cheaper because of stuff getting manufactured in foreign countries and services got cheap due to immigrants filling lot of positions. Most of the farm jobs were taken by farm labor from mexico. Engineering jobs were primarily filled with immigrants as well. This phenomenon didn't happen in medical field but only happened in field where there is no licensing needed for services ( like farming, engineering , restaurants..etc). Licensing enables protectionism. Since most of the functions of medical field are licensed including doctors, nurses and hospitals, they are protected from globalization and competition from foreign doctors/nurses who want to practice in US. This disparity caused medical field to look more expensive RELATIVE to the other fields. In essence the US consumer is not getting the benefit of cheap international labor in medicine . This probably is not the complete story and i am guessing more components of the medical bill are protected from market forces like prescription drugs..etc.
Licensing also forces some arbitrary body to decide what kind of service providers the consumer needs.If it were a free market, the market will decide what kind of training the doctors need to satisfy the demand.The salaries will also be based on the market prices. If the society is not rich , it will decide to go for doctors who are trained cheaper ( like in India). ofcourse, the quality will be lower but that's what the society can afford and is most effective. people who can afford higher quality will choose a doctor with more training. Its a self correcting system. in car industry, some consumers buy honda civics and some consumers buy a Porsche.IF govt mandates that people only buy cars with standards of porshe, most consumers will have to take public transportation because they cannot buy civic and cannot afford Porshe. Current licensing system forces a over trained doctor down the throat of consumers. actually a third party licensing body would never be able to decide what training is most effective to consumers just like soviet style centralized planning could never decide what products are needed by citizens. Free market is the answer.
Certification is better than licensing as it informs the consumer of the choices but does not force a particular choice. Hospitals will always choose the doctors with the right certification for the right job without being dictated by a licensing body. this will drive down prices.hospitals will also vet the doctors to save hospitals reputation.
from wikipedia http://en.wikipedia.org/wiki/Health_care_in_the_United_States#Licensing_of_providers: "American Medical Association (AMA) has lobbied the government to highly limit physician education since 1910, currently at 100,000 doctors per year,[111] which has led to a shortage of doctors[112] and physicians' wages in the U.S. are double those in the Europe, which is a major reason for the more expensive health care.[113]"
113: http://reason.com/archives/2009/08/27/the-evil-mongering-of-the-amer
3) Mandating Emergency services (GOVT MANDATES) :
PROBLEM : GOVT + FREE LOADERS - Vote bank:
The day Govt mandated emergency services to general public , it created a huge sink hole in the system. Mandating hospitals to perform any services to general public irrespective of their ability to pay means in essence they are forcing some people to pay for other peoples expenses. When a hospital is performing a emergency service and the consumer does not pay it, the hospital passes on the expenses to other people. Anytime you create a system where the consumer does not have to pay himself , he becomes price insensitive and this creates lots of waste. Most countries don't have this kind of mandates. Also this creates incentive for too many people coming to emergency services instead of getting care early on which could have reduced the overall medical cost for the society.
In the absence of Govt mandate, new charity based hospitals ( partially funded by govt or private) will pop up ( like pre insurance period of 1930's) and give some form of cushion to the most needy.
MANDATING ONE PERSON TO PAY FOR ANOTHER PERSON'S EXPENSES IS NEVER A GOOD IDEA. Be it through insurance mandates, court system ( malpractice litigation expenses) or hospitals ( mandating emergency services)
4)Medical Malpractice insurance costs (GOVT forcing other people to pay a litigation winner -through malpractice insurance ):
PROBLEM : GOVT + LAWYERS LOBBY :
Giving Patients the option to Waive certain Rights to Sue for Medical Malpractice for certain services is important to address this issue. Since Medicine is not an exact science and involves considerable risk, GOVT cannot force everybody to pay for the costs of not being perfect. In essence the GOVT through their court system is forcing doctors to work overtime to make a service more risk free than its possible. after certain point there are diminishing returns in trying to reduce risk.I have heard stories that some doctors spend more time filling paperwork/unnecessary expensive tests than actually treating patients. There is some inherent risk in certain services and patients should have the option of allowing the doctors to take the risk so that the patient can get the service from doctor at reduced cost. of course driving a car involves risk but that does not mean we force all the car manufactures to design risk free cars. even if its designed, it will be unaffordable by many consumers. Another aspect of the medical malpractice is the money awarded by the courts.
The primary focus of the court system should be to create incentive for the hospitals to reduce recklessness and malpractice which can be accomplished by other punitive measures rather than awarding large sums of money to patients. example: you can suspend a doctor from practicing if he does some fraud/malpractice rather than award 1 million dollar to the patient ! The focus should be to reduce fraud not make the attorney's rich.ofcourse the money awarded should be reasonable so that attorneys are motivated to take the case but it should not be ridiculous amounts since we all have to bear the cost.
AT THE END OF THE DAY EVERYBODY IS RIPPING OFF HARDWORKING MIDDLECLASS-INSURANCE-PAYING AMERICANS.
SOLUTION WHICH WILL WORK : FREE MARKET PRIVATE HEALTH CARE SYSTEM for the majority and GOVT OR CHARITY RUN HOSPITALS FOR THE POOR AND NEEDY.