Citation
ISBN:: 978-0-698-40718-3 CiteKey:: rosenthalAmericanSicknessHow2017 Bibliography:: Rosenthal, Elisabeth. An American Sickness: How Healthcare Became Big Business and How You Can Take It Back. Penguin Publishing Group, 2017.
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Context
Honestly couldn’t find anything else that looked good at barnes & noble. I have always felt like I knew our system was bad, but it’s been a while since I really investigated the mechanics of why.
Summary
- incentives are fundamentally missaligned. Insurers want to make more. Patients need care access, and going uninsured is bad personal choice so they join up. Hospitals want security so they do billing shennanagins.
- Not normal marked behavior. Purchases are often involuntary and geographically constrained. Consolidation for better leverage (both care and insurers against each other) exacerbates the lack of options for consumers, reducing market competition effects.
- Regulatory capture. Speaks for itself, prevents dissatisfaction from creating systemic change.
Significance
There are some practical tips about how to navigate healthcare, even as one of the lucky ones. Probably worth having a hospital cheat sheet…
Meters
The origins
The very first collective care was for employees in remote, large industries like logging in the northwest during america’s expansion. The first insurance group started in texas, and it was focused on catastrophic, long-term care. You would either die (see life insurance) or get better and be done. These policies were to protect lost income and long term stays to recover. The very first ones were a part of the hospital themself - they offered a way to maintain better solvency for their non-profit mission. But overall these were not popular because there weren’t that many high-tech treatments to be done, you mostly had to wait and see.
The rush of new technology prompted the need for private insurance to cover new treatments. It just so happens this got intertwined with employement because of WW2 income freeze policy (1940 to 9155, 10 to 60 %). At this point the insurance sector gained a bunch of new, for-profit entrants. They selectively choose more profitable patients, and drove the holdouts into being for-profit. After insurance went for profit, naturally the ratio of money spent on care to gross revenue went down so they could pay higher dividends. The competition for market share also led them to offer increasingly expansive plans beyond simple catastrophe insurance.
This sets the stage for today: a field of for-profit insurers, allocated to people based on employers, obtaining services from medical institutions which are mix of non- and for-profit. In the late 70s as patients stopped caring about the charge cost, because insurance now paid for it, hospital prices began to creep up. Insurance complied and hospitals got mad liquid. (10x increase nationally in hospital revenues mid 60s to mid 80s) They hired consultants to manage it who started the move towards privatization. The ones who stayed non-profit still got very wealthy and started exorbinant investments so they didn’t technically render a profit.
By the mid 80s insurers got fed up and started building HMOs. HMOs used doctors to manage care for a specific list of patients. By controlling referrals, pre approvals, and setting fixed paymentst per head, they discouraged ‘care creep’ where hospitals and patients were signing up for more and newer and pricier. They also vertically integrated and often owned hospitals and employed doctors directly. They initially worked and slowed cost growth in the 90s, but patients were dissatisfied with the quality of care and administration. This caused the slip back into PPOs and sharp cost growth.
Current marked dynamics
- there is no reason for insurers to actually attempt the reduce the cost of care if they.
the worst mechanics
- Extenders. The idea that a single physician can actually monitor the service performed by the interns is absurd. Started in the 60
- drug patent process.
- stop non clinical improvements from delaying entrance of generic drugs (they currently do)
- Drug marketing. It’s only us and new zeeland. Clearly creates drug seeking behavior.
- insurers
- allow collective bargaining for medicare. get cost saving from top 10
- Reference pricing if you wanna stick with market based, or simply command price on a unitary system.
- Require provider lists to be static for the duration of the policy contract… how long are those contracts tho? Yearly?
- FDA
- in addition to a placebo, also compare it against the leading alternative.
Plancks
| Highlight Color | Meaning | Note |
|---|---|---|
| Red | Disagreement or error | …for both opinion and fact |
| Orange | Important point | …for the story |
| Yellow | Question | …for the story or myself |
| Green | Interesting point | …for myself |
| Blue | Notable prose | …diction, syntax, or rhetoric |
| Purple | External reference | |
| Magenta | Uncategorized | |
| Grey | Best quotes | No more than 5 |