>These “high-markup hospitals” (HMH), which comprised about 10% of the total the researchers examined, charged up to 17 times the true cost of care. By contrast, markups at other hospitals were an average of three times the cost of care.
>They also have significantly worse patient outcomes compared with lower-cost hospitals, new UCLA research finds.
>After instrumenting for the patient-nursing home match, we recover a local average treatment effect on mortality of 11%. Declines in measures of patient well-being, nurse staffing, and compliance with care standards help to explain the mortality effect.
Speaking from experience, the only people who can afford to live as nursing home staff (typically LPNs) are the poor. In my metro area, only the presence of a large low-income high-crime area allows for a low enough cost of living for its residents to survive on nursing home pay. I think these folks can make more working at McDonalds. The quality of care is garbage... Less than 10% of nursing homes in my area provide the care I'd want for my relatives.
Oddly enough, even homes that advertise RNs and a high number of staff still don't provide the care I'd want for me relatives. The only homes I've been to where the staff are genuinely great are nursing homes out in the boonies, in rural areas at least an hour outside of my city.
I can echo this statement. My mother is in a nursing home facility for the last 8 years.
She is located in the facility she worked in as a poor laborer before becoming a resident. The facility is over an hour from the nearest metro area.
The care she receives there is pretty good. The staff are mostly locals in the rural town and are comfortable being poor and living that life.
We considered moving her into the city to be close to family who have to drive almost 3 hours to see her but the care is so bad in the city it isn’t worth it.
We have had family members in city nursing homes and they’re abysmal. Which to some level I get. The people there like you stated are underpaid and overworked. They live in bad neighborhoods because of systemic poverty. They bring all the stress of being poor in a metro city with them to work. Quality of care plummets but there’s nothing that can be done because no one is going to pay more than bare minimum to reach mandatory staff minimums.
> locals in the rural town and are comfortable being poor and living that life
> all the stress of being poor in a metro city
Is it generally accepted that people in similar economic circumstances have improved life satisfaction in rural areas? It is counterintuitive to me given any city typically has better low cost amenities like museums, libraries, and parks than rural areas that I have observed.
Think about how often you got to a museum, library, or park compared to how often you eat and pay the monthly bills. The more expensive the area, the higher the routine bills and wages don't always track that, especially at the low end.
Both have significant advantages, shared walls reducing energy costs and the ability to live without a car can make a huge difference at the bottom.
It’s really suburbs that end up the most expensive. You combine higher housing and labor costs vs rural areas without any of the cost savings of cities.
Some people prefer space, privacy, and nature over cultural amenities. It's possible to survive on fairly little income if you own some land and are able to hunt, fish, and grow a bit of your own food. Being poor is still tough anywhere but people get by.
> The quality of care is garbage... Less than 10% of nursing homes in my area provide the care I'd want for my relatives.
As a paramedic who delivered probably thousands of patients to (and picked up patients from) nursing homes, I'd unfortunately absolutely agree. Not always to the point of filing complaints, but not great.
> Oddly enough, even homes that advertise RNs and a high number of staff still don't provide the care I'd want for me relatives.
As that same paramedic, absolutely, you know why?
Many of those homes have ONE RN as the supervisor for a bunch of LPNs and CNAs. And they have policies/insurance/whatever that say "anything larger than a bandaid, call 911 and have them deal with it", which leads to ridiculous situations where you have two nurses standing around while my partner and I bandage a straightforward laceration.
Those are usually the ones advertising out front "Round the clock nursing care" (and absolutely charging for it).
There was an article here in HN how nurses and nursing home staff in a lot of US are basically using an "uber for Nursing" app where you get a request and you can accept it or not......but the company that built it has a "desperation" score on every nurse and the more desperate they are estimated to be, the less money they are offered for the job - the logic being that they are not in a position to refuse.
Honestly, the article literally made me want to vomit. I'm not religious but our society has sacrificed everything human in the worship of mammon.
The apps are ESHYFT, ShiftKey, ShiftMed, and CareRev. CareRev is a YC company (https://www.ycombinator.com/companies/carerev), so maybe the founders are around to explain the technical details of their desperation algorithm or why they allow employers to cancel shifts with 2 hours of notice.
Honest question - are you trying to downplay the absolute horror of our technofeudalistic society, where nurses(!!!) are paid in a gig economy betting on their hours, where (if you read the report) the hospitals are free to cancel their shifts with no or little penalty even during the shift, while nurses are heavily penalized on every side, and things like having a lot of debt means you will be offered less money for your shifts because the app determines you are desperate?
Yes sure, technically that's no different than Uber hiking up your price at 3am because really, what other choices do you have.
But I do hope you spend a minute to wonder what is it doing to our society as a whole, and how the relentless pursuit of profit means we treat people whose job is literally to look after others like disposable trash that can be priced the same way a taxi ride is.
Sure, it's "just a scary way to describe it" - and I hope it's really scary.
What you described is nothing new. Staffing firms for nurses have existed for a long time. These apps are automating the process and making it easier for both sides. I'm open to the idea that it's worse for workers but I haven't seen it. People seem to flock to these apps. To me that means they prefer the arbitrary and capricious nature of an algorithm over the arbitrary and capricious nature of human managers.
I'm sorry, what is your point then. Because I thought it was that the apps and hiring houses for nurses are effectively the same - which is why I'm asking if they also pay less if you have more debt.
For the company the algorithm works for? Yeah, no doubt about it. For the nurses? No, I don't believe that - unless like I asked earlier, the employment agencies also reduce their pay if they think they are desperate. In which case I'm happy to concede this point.
This highlights the problem with privatizing things like healthcare and education, something libertarians don't understand. It works for the Koch's because they can pay for anything. It doesn't work if you're not rich.
I wouldn't say privatizing is the problem. It isn't. Private is often, or generally, good, as it gives you the freedom to pursue good ends without unnecessary involvement of state bureaucracy. It's bad and weird to have the state involved in everything. It's for-profit that is problematic in the mentioned cases.
Healthcare, insurance, banking, education, and so on should be not-for-profits or nonprofits (depending on the case).
All nonprofit means is that you are not organized with profit as a primary goal. It doesn't mean you don't make money, and it doesn't mean that executives don't have outlandish compensation.
Main problem with non profits in my understanding is, that they are often created for tax evasion purposes, but the legit non profits still get the regulatory heat.
What is the incentive for a private entity to engage in non-profit business.. charity?
Nobody want's the state involved because they think they'll do a better job, they want the state involved because it's the last option available with incentives remotely aligned with the benefit of the polity.
Anecdotally, my friend's mom was is a nurse at a hospital that got bought up a while ago. During COVID, her pay and the hours were awful. She left shortly after. It blows my mind how little some hospitals can pay a nurse, while others are paying much more, all for the same core work. I believe she has since found a new hospital to work at and is making significantly more.
As the son of a nurse, the lack of hazard pay for putting up with doctors’ egos is also unconscionable. Doctors make mistakes all the time but you wouldn’t know it by looking at them.
And to extend your statement, and not to imply this was what you were saying:
overwork in Nursing doesn't just happen either, the scheduling and staffing is very intentional and very much a management decision
Is anyone else here also see the insane schedules nurses often work as unsustainable? 12 hour shifts seem incredibly common. I get there's risks in patient handoffs, but there are risks in understaffing and overworking people as well.
I personally know of several people who ended up having to leave acute nursing because they just couldn't continue with the schedules while trying to have any kind of sane family life. It seems to me hospitals need to change up schedules to have better options for work.
But I'm a lay person tech bro looking at an industry I only have a small window in. What are the other arguments for and against these kind of long schedules?
These are the hospitals that are essentially all travel nurses.
Worked to death, but well paid. Don't actually have to care anything more than the bare minimum because at the end of the day, there's an end of the day (contract).
I can anecdotally confirm this, based on my father's experience in a private-equity owned facility in California. It was astonishing how under-staffed they were for the amount of care the patients needed. (I'm sure they were at least nominally in compliance with whatever the regulations said, but that doesn't mean they were adequately staffed.)
Thing is, I loved those nurses. I watched them walk in with the look I remember from my restaurant days when you knew you'd be in the weeds all shift - call it a hundred-yard stare, if you like. They were all completely burnt out, and openly and cheerfully cynical and contemptuous towards the owners and administrators, but for the sake of the patients they just got on with it, as best they could. I don't think I ever saw the head nurse sit down.
There weren't enough supplies, because the laundry service was late, so I went back to my dad's house and brought him an extra blanket. The next day I got another for his neighbor.
There weren't really any rules, because nobody had time for that. The blanket thing? Shouldn't have been allowed, especially giving one to someone else. I asked about visiting hours, and just got a raised eyebrow, and "just put 8pm on the signout sheet". I said "well, then, I'll come back with a six-pack and stay until midnight!" She laughed at me, because I was (half) joking, but I'm pretty sure that would have been fine.
More substantively, when my dad needed the heavy-duty painkillers - prescribed by his doctor, mind - the administration (reached by phone) wouldn't allow them to be dispensed - supposedly because of the liability of having that kind of controlled substance on site; we sorted it out, but it took a couple of of days - when that happened, I said I'd bring in the bottle he had at home and give them to him myself. The nurse said pretty much "we can't do that - but if I didn't see it, it didn't happen," so I did. Then she made sure to give him his other medications herself, so she could check on how much I'd given him, and that it wouldn't cause a problem with the other pain-killers he was on.
I'm sure all of those things were wildly "wrong", from someone's point of view - ethically, or legally, or fiscally, or something. But I viewed the whole situation as so morally appalling - people live there for months, waiting to die - that I can't view those nurses' ethical commitment to whatever it takes to make their patients' lives more tolerable as anything but admirable.
Thing is, we're eating our societal seed-corn. The more awful those jobs are made, the more quickly people burn out of them, and the worse the care provided will become. Those folks were dying on their feet, and there was no help coming, and I don't know how much longer that facility - let alone the whole medical system - can stay afloat on those admirable people's dwindling store of compassion.
But hey, some folks got a little richer by owning that place. All the rest of it's a small price to pay for living in such a land of glorious opportunity, right?
Does that extend to the staff or do you just have some weird hangup about collective groups? Because you know NGOs often pay their CEOs huge salaries, well beyond what they need to survive. It's all profit.
Seems like a non-sequitur. How are you addressing the perverse incentive? Yes CEOs get paid too much, yes workers get paid, there’s no “weird hang up” in the parent comment. It’s just logical that if our country believes as a founding principle in life, then don’t let money and profit get in the way of life.
Even if non-profit groups are paying high salaries (usually to retain talent), it's very different than profits going to shareholders. The purpose of a _for-profit_ company is to deliver returns to its shareholders. Therefore, decisions are inherently biased towards increasing that value as much as possible. Whereas the purpose of a non-profit is not to pay high salaries to its CEOs, and therefore decisions aren't biased towards that, nor does the CEO's salary grow relative to the hospital's growth. (The hospital increasing its profit margin by 15% doesn't mean the CEO's salary goes up by 15% -- whereas it would mean that shareholder value increases by 15%.)
This is an impossible argument to make in America because the mindshare and persuasion behind the idea that free markets are best have clouded all humane judgement.
We have to move the argument to “this is an illegal business”. The Right is an amalgamation of extreme Libertarianism and race-centric Nationalism currently, and making a persuasive argument to them requires breaking everything they think they know about what is “good” in the world.
I say this with respect to actually politically reshaping the discourse dynamic (it has to start at debate).
The Right is the obstacle to solving this, not the Left. This is not a universal issue, it’s only a universal issue for people to politely agree and get along, but all actionable items are against the ideology of the Right. To put it simply, to get to where we need to get, we have to chisel and whither away their narratives and mindshare in debate, they skate freely on this topic. Their stance and narrative actually have no place in a problem-solving environment (we can’t solve it if the underlying ideology holds free markets paramount, over humanity).
I don’t hear anyone (well some, but very few and usually not taken seriously) suggest police and fire departments should be for profit, so clearly it’s understood that some services should not be profit driven.
But apparently it’s a huge leap to extend that to healthcare.
Certain aspects of their jobs absolutely could and perhaps should be privatized.
Getting the patrol aspect of policing privatized would cut down a lot of the worst of the stuff cops get caught doing.
You don't see rent-a-cops going off and killing people.
The inspection and compliance related clerical work that a lot of municipal fire departments do could probably be privatized but I don't see an argument for it like I do with cops since they're less abusive. Nobody ever wrote a song called fuck the fire department.
> You don't see rent-a-cops going off and killing people.
Haha, I just saw a video the other day of a couple of “bounty hunters” (bailbondsmen) pulling up with tactical gear and rifles and kidnapping some kid because he had the same name/ethnicity.
Naturally (and thankfully) these idiots are being charged, but one of the kidnappers sat in an interview whining about how his job was too hard because he lacked qualified immunity.
> Getting the patrol aspect of policing privatized would cut down a lot of the worst of the stuff cops get caught doing.
Are you referring to something like the current private security patrol or an actual police? If it's the former it already is there, if it's the latter I'm not sure how that'd cut down on the amount of bad things police do today.
This is an excellent point. We all seem to grasp that private fire and cops would be a an awful idea.
And as I'm sure you know, the answer to why it's a huge leap for healthcare is the obscene profits that healthcare companies make off of the healthy, the sick, and the dying.
Now let's recognize that we live in a system that fully supports this trading of health and lives for money.
> This is an impossible argument to make in America because the mind share and persuasion behind the idea that free markets are best have clouded all humane judgement.
Is this according to something like Gallup polling? Or according to what the talking heads on cable news say? Americans can be very progressive according to polling data, despite all the best efforts of the propaganda machine.
The implicit assumption in libertarian perspectives is that all parties are rational and have similar levels of information. In healthcare, this is simply not true. The average person isn't capable to judge what is and isn't necessary for them (outside of the small amount of very routine and elective care).
Likewise, if a hospital hands you a bill for 30k and you need help, are you really going to be able to negotiate and find a better price?
Check out Certificates of Need. You need one to open a new hospital in an area.
The other existing hospitals in the area get to comment on how it would affect their business and if it would cause them to reduce their investment.
This is all framed as "ensuring communities are appropriately served with healthcare capacity," but CoNs were an idea that was conceived by and lobbied for by ... hospital owners.
I'm the last person here who would defend provider chains, who I believe are in fact at the root of the problems in the American health care system, and certainly the Certificate of Need system --- which applies variably to about half the states in the US --- is stupid, and does restrict the market (most markets are somewhere on a spectrum between free and unfree).
But the alternate problem exists too: hospitals with too many vacant beds, and hospitals shutting down because lack of utilization makes it impossible to pencil out keeping them up and running. That's happening where I am right now.
How is that not just a consequence of market based healtcare? Winners and losers is a natural consequence of market competition, and the instability it brings is natural as well.
Careful what you wish for. The two major hospitals in my area are run by (1) the Catholic Church, and (2) the local major research university. While I'm sure they could get worse, if PE took over - I've got friends and family who received disastrously poor care at both of 'em. And neither hospital ever cared about that.
I was charged $6000 for literally walking into the ER of a hospital in 2022 when I had covid and was having trouble breathing. This did not include the 20 mins of tests they ran for me before telling me I was fine and booting me out within the hour, those were billed seperately. Literally just the cost of using the ER was $6000 (this was the adjusted price after insurance), in addition to anything else. As you can tell from this comment, I'm still mad about it.
Which state is this?
I've gotten lucky with my insurance, expecting big bills. But I think some state laws are stricter than others when it comes to Surprise Billing. Was your hospital in network?
This was in California (greater Bay Area), and the hospital was in network, but some of the ER physicians ended up not being (not the source of this part of the bill). I had a high deductible plan (10k IIRC?) so that I could stock away cash in an HSA every month. I've since switched to a much lower deductible plan in case I needed to go to the ER again, but then I also to another county and have gotten much more reasonable bills at the hospital near me.
similar. i guess i got a bargain cause I got 2.5 hours in ER with a couple tests for only $4k! Adjusted down to .. $2300 after 'insurance' (which I was paying $500/month for, with a $7k deductible).
One of the most important provisions of the ACA was the caps on the "medical loss ratio", the percent of insurance premiums paid out for medical care. The act required insurance plans to maintain a MLR no lower than (IIRC) 70-80%. Before then, plans (eg, targeting college kids) had MLRs as low as 10%.
(For comparison, Medicare/Medicaid has something like a 95% MLR, because it has low administrative overhead and isn't returning a profit to shareholders.)
17x upcharges, if they were extracted at the insurance level instead of the hospital level, would be the equivalent of a MLR of around 6%.
This of course has the unfortunate side affect of rewarding insurance companies for overpaying for medical care by allowing them to raise premiums and thus generate a higher profit.
I wonder if we will be allowed to share this information in the future in someone knew a love one died in for profit hospital that might provoke violence against feel market believers.
> Isn't trading higher profit for +11% more deaths also violence?
I have a friend who firmly believes that speed limits higher than 50MPH are violence because they lead to increased deaths. He argues that if we cared about people's lives we would impose a strict 50MPH limit on the roads and even force all cars to top out at 50MPH from the factory.
There are millions of tradeoffs in the world where we could reduce deaths, but there's never and endpoint where it's truly done. It's really easy to imagine revenge on PE firms by crushing their profits for a noble cause, but the conversation becomes a lot murkier when the impact starts hitting closer to your own paycheck or lifestyle.
>I have a friend who firmly believes that speed limits higher than 50MPH are violence because they lead to increased deaths. He argues that if we cared about people's lives we would impose a strict 50MPH limit on the roads and even force all cars to top out at 50MPH from the factory.
If you really want to stir shit ask him what we enforce those speed limits with.
You open your hood to see a 50 mph max speed engine in your vehicle...
You notice that roving speed enforcement is no longer necessary except in school zones, freeing up public resources.
You contemplate this new world... Is this... violence? It must be... manufacturing regulations are violence against businesses (people)! You relax a little.
You imagine someone 'woke' being angry at your incisiveness, you are calm.
This is what I'm getting at in the sibling comment. Most people make decisions that in the aggregate cost lives. The causal connection and moral weight of taking a life through speeding (or, more likely, by helping create the permission structure for everybody else to speed by speeding yourself) is pretty clear. And I'm saying this as someone who drives at the prevailing rate, rather than the posted limit.
None of this is to say that PE firms squeezing vital hospitals aren't morally culpable. Just that there's a meaningful distinction between immoral decisionmaking and violence.
That's the "magic" that underpins all the perverse things modern western societies engage in.
Life is considered valuable in integer quantities but fractional life is considered value-less.
People are free to do, endorse, concoct and peddle all sorts of things that waste people's time (life) or waste people's money on the basis that it "saves lives" because it prevents lives from being lost in whole numbers but the sum total of the little fractions ad up to more.
Intentionally and artificially reducing the quality or quantity of life-saving resources to the point of excess death is, in fact, violence. I think you wouldn't have trouble recognizing the starvation campaign is Gaza as intentional violence.
Thus, I have no trouble asserting that PE firms commit intentional violence against patients.
Indirection allows you diffuse the responsibility into the anodyne 'immoral decisionmaking' while social murder remains as it ever was.
Hurtling down the road in excess of the speed limit is also dangerous. Both actions have some probability of killing someone over a long enough time horizon. What's the threshold? Or are most people in cars also essentially murderers as well?
It isn't 'all the drivers' fractionally at fault (others can quibble about that), it's the people who create the moral hazard. The car industry and politicians that decided that the ungoverned car, the road, and the parking lot will be the only way to traverse Dallas or LA lo those many years ago, the ones that affirm that system with 'one more road' using tax dollars year after year, knowing that more people will die as a result.
https://en.wikipedia.org/wiki/Motor_vehicle_fatality_rate_in... <- the line goes up.
They have a duty of care as representatives that they are failing to meet. Compare that to cities in Europe or the North East. When you make policies that serve the few and sacrifice the bodies of the many, that act is violence.
Likewise, with PE. When they intentionally understaff a hospital, no single doctor is responsible for killing the patient that died bleeding in the waiting room. It is the choice that we allowed that PE firm to make. Are you comfortable with a fresh MBA using excel to ensure that your local hospital should have four less doctors than strictly necessary to treat you in a timely manner? Society doesn't need to be organized this way, we can and should demand better.
Imagine the reverse, a municipality decides to privatize their water and sewage treatment, but puts no restrictions on the results as long at those wealthy enough are not inconvenienced. This is precisely how you get Flint. Or redlined cities that put the 'undesirables' in industrial waste parks. These acts are violence.
This seems like a worldview calculated so that individuals almost never have any culpability --- even when speeding down the road, the responsibility for that harm is more properly attributed to corporations and politicians. From that vantage point, it's clear to me why one would see the decisions of a hospital-owning PE firm as "violent", while not seeing the decisions of a reckless driver that way.
The term "social murder" has a long pedigree, and is really the term of art for this kind of concealed/indirect "violence". Mark Twain's quote about the two Reigns of Terror also applies, and is perhaps a little older.
Right, and if you go from the actual definition of social murder, basically everybody in the G8 is a murderer, unless you artificially confine the analysis to your own county.
I'm sure the concept has a lot of utility philosophically, but when you try to distill it down to "PE firm owners are murderers" you wind up in pretty crazy places unless you supply a lot of motivated reasoning and special pleading.
There's infinite levels of badness and eventually it does reach a point, be it in risk, probability, magnitude, or impact, in which it is super bad, and we may consider it violence, or murder, or crimes against humanity, or what have you.
Everything is not everything else. Scale not only matters, it's almost the only thing that matters.
Nobody can really because it's complicated. Or, at least, nobody can agree, which is why we have the terms. However, I think the terms have some validity, because the broader concept does.
I mean, is Hitler a murderer? Is your run of the mill burglary gone wrong worse than the Holocaust? Obviously not. So there has to be some kind of understanding of organized death.
I recently saw an article which was talking about a study thatc concluded that if the Autobahn here in Germany had a speedlimit of 120 Kph we would save a grand total of roughtly 58 lives per year.
"we could reduce deaths, but there's never and endpoint where it's truly done"
What a wonderful argument for never trying to improve the world you also reside in.
"your own paycheck or lifestyle."
If excess mortality is required for your lifestyle, change how you live. Do you deny insurance claims for fun? Are you the human avatar of GE and Raytheon? Do you need to manufacture child-vaporizing bombs to maintain your 'lifestyle'?
Genuinely, what is wrong with you? PE firms are not people to take vengeance on. They are not necessary, if they vanished from the Earth tomorrow, the 'worst' outcome is the wealthy owners and workers would need to find new, less violent, employment.
That's a little bit out there if taken out of context. On my street the limit is 15 KM/h, on most city roads it's 30 (again, KM/h, not MPH), but on the actual highways where only cars are present and where you don't necessarily need to be, the limit is over a 100.
Now I can probably understand how one can take such radical position, when living in a place that doesn't restrict cars as much as they are restricted here. It's like being so much disillusioned with US that USSR propaganda starts to be appealing and belieaveble. I guess?
To the extent it is, people are universally guilty of it, unless you can find a clear bright line for which selfish(/rational) decisions are violent and which aren't. Is it some number of hops from the person who dies that makes the difference?
> To the extent it is, people are universally guilty of it, unless you can find a clear bright line for which selfish(/rational)
We all ingest some level of arsenic, and are "universally" exposed to radioactivity, but just because something is falls on a continuous spectrum, doesn't mean all levels are equal, there is a point where it becomes too much. That point will not be the same for everyone, but it exists.
> Is it some number of hops from the person who dies that makes the difference?
No, because you're insinuating that since we're all responsible for some micromorts[1], somehow our culpability is the same as those who are some responsible for hundreds or thousands of morts[0], which is equating across 10 orders of magnitude in risk to human lives.
That's not actually what I'm saying at all. I'm saying that we make specific choices that have material mortality costs to the world, not that simply by taking up space in our living room we're responsible for some number of nanomorts or whatever. Speeding on the road isn't the most important of those choices, but it's usefully easy to reason about, so start there. If you want to get closer to the culpability that a PE firm has, think about all the ways in which we deliberately benefit from global inequality.
All of this can be (is!) bad. But it's not violence in any meaningful sense of the term.
I wonder why your opinion is so unpopular around here.
Surely the hapless landscaper is substantially less responsible for any violence, death, etc, etc, he benefits from than say a lobbyist who gets paid to get the laws to favor his employer.
We don't need to figure out an exact formula in order to be able to conclude some parties leverage violence far more than others.
I think the replies splitting hairs on what is violence and what isn't is missing the point.
This is a hospital. A building designed for differentiating life and death and(hopefully) attempting to steer towards the former.
This isn't a speed limit or some other market where there's no ethical consumption. One doesn't choose going to a hospital. It's a place you go when you are at metaphorical gunpoint.
I wouldn't call it violence, but I think it's A Problem when companies have two viable policies, and they choose the one that is known by them to statistically cause more deaths.
On top of that, people will give them social cover for making this decision. Because, y'know, its just capitalism/business or whatever. It's not like they murdered someone, they just told their worker bees to do something they knew would kill more people than they had to.
My impression is a lot of US health care problems are caused in part by a sort of unholy combination of restricted competition and access, together with profit driven market participants. So you end up with this marketplace constricted by overregulation — some well-meaning but often basically occurring because of protectionist moats and regulatory capture — increasingly controlled by profiteers trying to extract as much money as possible, with patients at the bottom, providers in the middle, and executives at the top. I think the problems with monopolies in the US are broad in scope but it hits healthcare especially hard because of how grotesquely distorted it is.
I'm not surprised by this finding, although I find in economics and healthcare forums the results tend to be misused (at least in my opinion), because it gets used to argue against any deregulation or cost cutting, instead of cost cutting of the type that tends to happen for the benefit of investors and shareholders, rather than cost cutting of the type that increases healthcare options and access.
> So you end up with this marketplace constricted by overregulation — some well-meaning but often basically occurring because of protectionist moats and regulatory capture
Don't hand-wave your claim of overregulation, be specific and name the regulations you think should go away.
The older generation MDs screwed up here, but now insurances are heavily pushing NPs and PAs to take their place.
The nursing orgs are naturally lobbying hard (MD and RN orgs have an icy relationship).
The quality and capabilities of these noctors—calling themselves residents and even doctors and performing surgeries and general anesthesia—is a
growing problem.
Better with noctors than nothing at all. I know that's a false dichotomy in the long run, but for the present it isn't, given the regulatory environment. PA/NP is basically backup plan for a lot of people that don't get into med school or don't anticipate they could.
Incompetent treatment is worse than not being treated at all.
It’s not to say that noctors can’t be competent within a narrow domain; it’s that they’re being taught to increase their scope of treatment beyond their training.
If it becomes common, then it’d be safer and more cost-effective to pay out of pocket and get treatment in another Westernized nation.
I basically treat NP/PAs and doctors as a pulse with a DEA license attached. Once you realize you basically need to figure it out for yourself, for much of anything but surgery and meds, you'll realize you are better off with them vs having police put you in a tiny cage for ordering drugs without a prescription (in my state I can self order imagery and labs, so don't need docs for that). I consider their opinion totally disposable but they offer some stuff the government will imprison me for if I don't get the magic signature for.
Just treat them as totally incompetent and nudge them where they need to go. No need to assume or rely on competence that may not exist.
According to the article, the caps were enacted because of a fear that the people might want too much healthcare. Do I even need to look into which party pushed this?
While important, this is immaterial to the NBC article. The PE firms CUT the number of employees in ER rooms in this paper, so having more doctors wouldn't actually help out the problem that the NBC article is describing.
"The increased deaths in emergency departments at private equity-owned hospitals are most likely the result of reduced staffing levels after the acquisitions, which the study also measured, said Dr. Zirui Song, a co-author and associate professor of health care policy and medicine at Harvard Medical School."
The issue with American healthcare is the profit-seeking capitalists.
Sure, it would make it cheaper. Would that result in these companies employing more doctors to perform the same amount of care at higher quality, or would it result in them retaining the standard of care they're currently providing while taking home a larger profit margin?
There are a lot of hospitals where there is an endless supply people showing up to the ER with non-emergent stuff because it is the only place required to take them, and their number is only limited by wait time due to triage; they'll just leave if it takes too long as their life isn't threatened and they have something else to do.
You could hire a whole army of doctors and they'd still be there, word gets around. If the doctors are cheap enough to cover whatever you can get from debt collection agencies to sell off the debt they'll never pay, then you could hire a lot.
They can't sell the debt for uninsured non-emergent case for enough money to cover the doctor.
Cutting doctors means only the most prioritized triage cases makes it to doctors, which skews towards people that are employed or on medicare and the money can be recouped, and thus improves profitability.
It's an end-run against the requirement they take in the hordes of people with no insurance who show up to the ER for low-income cases and no way to pay it.
If doctors were so cheap as to be covered by the sales to debt collectors, the whole thing gets flipped, as it would be profitable to just hire armies of them to cover the hordes who come in with non-emergent cases.
It absolutely would. Source: live in a country which "democratized" access to medical schools and flooded the market with doctors. Consequences? Let's just say that the term "secondary effects" doesn't quite cover it.
This thread is talking about ERs so let's focus on that. Pay for a 12 hour shift has fallen by over 50% and that's without accounting for inflation. As a result, only heavily indebted and inexperienced doctors are manning the ERs now. These are critical life saving jobs that ought to attract the most experienced doctors but they turned into reassigned-to-Antartica tier jobs that only new or failed doctors put up with. Now factor in the substandard education provided by the hundreds of newly created medical schools which don't even have a hospital for students to practice in. The result is of course stupid and incompetent doctors manning ERs. I remember one guy who sent home a patient with textbook myocardial infarction symptoms without even ordering a routine EKG, obviously leading to the patient's death. Imagine being that dude's lawyer.
Depressing the wages of healthcare workers has fatal consequences. There's no reason at all to spend the best decade of one's life busting ass in medical school and residency if one is not gonna get rich off of it. You want your doctor to be the smartest, most studious, most hard working, most debt-free person you'll ever meet. You don't want to put your life and well-being in the hands of a stupid indebted doctor who graduated from a diploma mill.
And the more expensive a doctor is, the more you save by cutting one/the larger the total wage bill for doctors is for a fixed number of doctors, making that bill a higher proportion of total expenses and a higher priority for cuts/the fewer doctors you get for a fixed amount of money.
> The issue with American healthcare is the profit-seeking capitalists.
Profit seeking capitalists would be fine if healthcare was a competitive market, like grocery sale.
But it isn't, and I honestly don't see how to make it one. Full price transparency would help, but I don't believe classical free market selfregulation can work out for the healthcare sector, by design.
You need good ability of healthcare customers to judge quality of treatment/medication, to know prices beforehand and to have sufficient choice for market dynamics to work, and every single one of those points is somewhere between really difficult and impossible.
An embedded requirement for a rational market is that the customer has to be able to make a rational evaluation of the costs of the good vs the quality, which just doesn't exist in medical fields. Patients don't know enough to make that choice and evaluate the efficacy of many potential choices of providers. Not being able to do that fundamentally kneecaps the implicit assumptions in the already faulty model that underpins the 'competitive market' analysis. We should just accept that and stop trying to treat it as one and provide it as a public good.
Most markets fail here. I can't even make good decisions about which electronics or appliances to buy, which restaurants to visit, which mechanic to use, and it's not for lack of research or unwillingness to pay. Advertising allows brands to build undeserved market reputation, and brands regularly sabotage their own legitimately established brand reputation for financialization.
I think it's particularly bad in medical decisions though because it's so much more advanced and cases are so varied it's difficult to compare doctor performance on different procedures. At least with products you generally get similar items each time so people can test multiple products in some scenario and a buyer can know what they buy should perform similarly.
For the overwhelming majority of things people to go to the hospital for, where you go doesn't really matter, because the treatment and diagnosis is extremely routine. This includes very serious things like cancer. My mother, through a variety of fortuitous events, was able to have her breast cancer treated at one of the top ranked cancer specializing hospitals in the US. She had acquaintances that had theirs treated at the local university/training hospital. They ended up receiving literally the exact same treatments.
Same for my own stuff. The first time one of my children got sick it was terrifying, so I naturally took him to the most premium pediatric healthcare institution. And what did they do? Basic tests to rule out anything particularly nasty, and fever management. The exact same thing the cheapest hospital does, except I got the privilege of paying 10x more for it and feeling like a complete sucker. From that point on - 'oh he's sick? shall we go to the university hospital, or the religious nonprofit?'
This is not entirely clear. Elsewhere in this thread I found a couple of studies on this exact topic. The first [1] is just for breast cancer and after normalizing across a wide array of variables, found no improved survival rates except for black women, which I think is suggestive of further biases.
The second [2] is for all sorts of cancers, but is a large observational study without much effort to control for biases. It found an overall increase in five year survival rates of 3.6% (64.3% in NCI centers, vs 60.7% in non-NCI). That's certainly something, but it's fairly certain that biases would bring that down a healthy chunk.
However there were significantly better outcomes in more rare/lethal cancers. For instance in hepatobiliary cancers, the NCI survival rate was 33.8% vs 18.7% for non-NCI centers. And that is largely the point I'm making. For the overwhelming majority of things, care is mostly commoditized and you will be fine wherever you go. The value of high end institutions is mostly only realized in the case of rare/serious issues, for which transfer is always an option anyhow.
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Though I'd also add here that these examples, cancer, are on the fringe extremes of what my point was. That there is a strong argument to be made that even cancer falls within it, just further emphasizes the point. If your local hospital can competently treat cancer, they can certainly treat the overwhelming majority of reasons people go to the hospital, which are relatively far more commoditized.
"can competently treat cancer, they can certainly treat the overwhelming majority of reasons"
No this claim, just because, is not weight-bearing. Extraordinary claims require extraordinary evidence. And I don't understand the motivation to make such a tenuous link when at a bare minimum one can look up direct data like joint commision and MPSMS safety data and related publications. There is tremendous variability in serious hospital safety events inter-institution for bread and butter admissions. One can further just examine CMS and NHS data for mortality and readmission for "mundane" MI, HF, sepsis, pneumonia, respiratory failure. OB/GYN outcomes are their own thing.
The flaw in reasoning here is that quality of care and outcomes is strongly related to the simplicity of diagnosis. A further flaw is the belief that care is "commoditized". Treatment protocols vary widely across institutions and health systems, often times based on cost factors. Certain basic things can not be done at night, or even the day for fully accredited hospitals. There's a big difference somewhere with 24 hour anesthesia airway and in-house surgery and not just an intensivist "on call" 600 miles away and staff that can't even do RSI. Transfer is not always an option, there's a reason critically ill people die more frequently in the sticks. If one is admitted to a regional hospital, they are unlikely to be accepted for transfer to a safer hospital unless they truly need an intervention that absolutely cannot be provided where they are, not simply because there is better backup provider support and a higher standard of safety. They will still remain at that higher risk for sepsis, or outdated care because the community physician group doesn't keep up with guidelines, or that hospital only offers the inferior treatment (or a limited formulary) for cost-cutting reasons.
Breast cancer and most cancers are not even typical inpatient encounters. Breast cancer is generally not managed on an inpatient basis, in fact one may never even have to visit an inpatient hospital campus for breast cancer. Upgrades for cancer are usually different than acute inpatient care. Breast cancer does not usually involve abdominal, intrathoracic or orthopedic surgery. Breast cancer does not usually involve advanced interventions like endarterectomy, ECMO. Cancer is a special case. Regardless of complexity, extrapolating cancer treatment to even the most "mundane" acute inpatient or surgical care really is beyond ridiculous.
This is a complex subject and this is a silly hot take.
Again, feel free to provide data instead of lighting strawmen alight. In general you are already speaking of things that are primarily relevant for people critically ill in senescence, which is both a fringe scenario and also (I think obviously) not the general case sort of scenario I'm speaking of. But even there! Out of curiosity, I decided to look up data on e.g. sepsis readmission rates vs hospital quality. [1]
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"One third of sepsis survivors were readmitted and wide variation exists between hospitals. Several demographic and structural factors are associated with this variation. Measures of higher quality in-hospital care were correlated with higher readmission rates. Several potential explanations are possible including poor risk standardization, more research is needed."
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As they're implying, this is likely due to biasing and not a causal observation. One possible explanation is that higher quality hospitals may be able to keep people knocking on deaths door a bit longer than lower quality hospitals, but it's not like night and day - they're still knocking on that door, just a bit longer. And so it makes sense that they'd actually have worse outcomes on discharge, including higher overall readmission rates. But once again the picture between the quality of hospitals is not this tremendous dichotomy that many try to frame it as.
Billionaires, in general, seek out the highest quality care money can buy, and have no limitations on the meta-factors that also improve longevity including activity, relationships, healthy food, exercise, etc. Yet their life expectancy (~85) is comparable to the life expectancy of Hispanics in America. The "Hispanic Paradox" [2] again emphasizes that longevity isn't about premium healthcare and money.
MI, HF, sepsis, pneumonia, respiratory failure are among the most common reasons for inpatient admission, not fringe.
Equating acute decompensation of chronic illnesses requiring inpatient admission to "knocking on death's door" is a bit simplistic.
No data has been provided showing how the relevance of outcomes based on institution of first presentation (not definitive management) for breast cancer, that is usually managed outpatient on an elective basis, has anything to do with outcomes for the "overwhelming majority of things people to go to the hospital for".
Even pre-pandemic the life expectancy of Hispanics was not as high as billionaires. Speaking of "deaths door" perhaps at least QALY, or something else is a more appropriate metric.
Let me first describe what I meant by fringe though. Take a random adult going to the hospital, not elderly, with no other major health conditions. When he walks in the door, what are the distributions of issues that he might end up having? Sepsis is going to have a probability of near 0. By contrast the typical patient that might present with sepsis - elderly, other major health conditions, well into senescence - he is generally indeed 'knocking on deaths door.' He might not answer this time (though there's a decent chance he will!), but he will imminently.
Your study compared hospitals based on a number of factors. The most significant was high volume, but in that case the difference between the highest volume hospitals and lowest was a 13.3% rate of readmission vs a 11.2% rate of readmission for hip replacement, and 12.4% vs 11% for knee replacement. Again I think this is another example of when you look at the actual data, outcomes fall quite close.
Beware their method of taking a sampling and breaking it into buckets and comparing those buckets. If even hospitals/patients were identical (which I'm certainly not claiming) and so the results were literally just random noise on a distribution, you'd see a major difference between the top and bottom buckets due to the nature of random distributions - 68-95-99.7 and all that. Their results show a signal beyond that, but it's generally a very misleading way of presenting data because of this issue.
Pre-pandemic hispanics had a life expectancy of about 82, which I described as comparable to the 85 of billionaires. I'd certainly expect billionaires to be higher for the endless reasons outlined in the already linked Hispanic paradox. The fact that it's only 3 years, less than 4% longer, is the point.
This is not anecdotal. At least for the cancer we're discussing, breast cancer, there is no meaningful difference between hospitals. Here [1] is a study on this exact question for breast cancer.
They covered an extensive number of variables across hospitals and patients (including NCI/ACS status). They found no correlation with improved survival rates for any variable except for black women receiving their initial treatment at an ACS hospital. While that is technically an affirmation of your claims, I think it is clearly suggestive of some form of bias rather than being a clear causal association.
I said for the overwhelming majority of things people go to the hospital for. And the overwhelming majority would be things far more commoditized than cancer - stomach aches, injuries, fevers, infections, cardiovascular issues, etc. I chose breast cancer because it is the most common type of cancer and at the extreme fringes of my what comment might cover. It just so happens that my comment does cover it as well.
Incidentally, it's also the same story for colorectal cancer, the 2nd most common type of cancer. Here's another study on the topic. [1] They have a survival rate of 88.6 vs 85.9 for breast cancer, but it's a large observational study that's not normalized, so the confounders/biases there probably explain the reduction in survival rate at non-NIC hospitals. Colorectal cancer is even smaller - 0.2%.
NIC hospitals only showed a significant effect on cancers with low survival rates, and especially on rarer cancers. For instance with pancreatic cancer 93.8% of people who went to a non-NIC hospital were dead in 5 years, by contrast 'only' 87.5% of NIC hospital patients were. Feel free to look up the data yourself. I'm not searching for cherry picked studies, there are none - as there seem to be oddly few studies on this question, and they all say the same thing. What benefit there is is quite small, and heavily driven by extremely rare things.
Feel free to find a single study that you think supports your position. I've provided extensive evidence for my claims which you want to claim is insufficient or somehow cherry picked. You've provided nothing, and are now relying exclusively on ad hominem.
You chose to take us down the path of cancer, not entirely unreasonable as I mentioned it. But it is clearly in the fringe extremes of my argument since it is one disease where, ostensibly, specialized care could really pay off. But it turns out that even in the case of cancer, the benefit of specialized care (for the most cancers at least) is small to zero.
If your local hospital can treat e.g. colorectal or breast cancer to the same degree as a specialized institution, then they can certainly competently treat the overwhelming majority of other issues that people show up to the hospital with, which are generally going to be substantially more mundane with rather more 'commoditized' treatment available.
Labelling markets "rational" is pure rhetoric. There's nothing even remotely rational about a market system, because the moral basis of calling markets "rational" is... greed.
Just greed. Nothing else.
All of the failed outcomes, deaths, pollution, lost opportunities, distortions of democracy, and other damages are a direct consequence of this moral system which claims that greed is rational - when in fact unfettered greed is clearly and objectively sociopathic, with predictable sociopathic outcomes.
We're all greedy. We all want to get the most for our money, time and effort.
Greed and desire push us to spend our energy, otherwise we'd simply conserve it.
It's normal, it's natural and it works. It's human (and animal) nature.
Altruism works fine in individuals and small organizations. But large systems based on altruism uniformly failed to provide the most basic necessities (like food) for their citizens. Can't work against human nature.
> We're all greedy. We all want to get the most for our money, time and effort.
We are?
For example, I never file taxes. I'm certain I could get quite a bit back. I am far from rich, I earn medium pay in Germany - medium overall, not medium in IT. (Because I deliberately took a more rewarding and relaxing job, but that's besides the point.)
I will not fill my mind with "money" stuff. Even if that costs me some of that money.
I am sure, given that the terms used are as fuzzy as can be, you can twist and shake the words until you can claim that I am "greedy", the problem with this rationality discussions is how extremely flexible the words used are, making it quite impossible to win or lose an argument. All one has to do is insist on one's own definitions... but taking a relaxed view, I don't see good way to make not-at-all-rare positions such as mine as a form of "greed", without severely twisting the commonly understood meaning(s).
I think a lot of that world view is self-fulfilling.
When I was a kid I LOVED working like the adults. That includes taking one to four week stints in factories, as a teenager in school. That was common in East Germany and encouraged, early acquaintance with work life. I did the same helping out my craftsman grandfather and my shop-owing grandmother.
Work was FUN!
But now, the reason I don't just go - which I would LOVE to do! - and work a few hours low-level jobs here and there, is because it's all been heavily commercialized. You just don't do that! Work has to be pain, and you get paid. Only an idiot would work for free!
During university, during a semester break, I took a job in a chocolate factory. I did not actually need the money! My parents paid (divorced, but both paid). I actually had a lot over at the end of university (cheap dorm housing and no fees for the university itself sure helped). I took the job because I wanted to work in a factory again. It is FUN!.
Until that middle manager a..ole appüeared. I had just optimized my in-between assignment of taking care of some machine chocolate thing, some mixing, I forgot the details. I had set everything up perfectly and now had to just wait a few minutes for the machine to finish.
In comes that.... manager guy. Immediately, seeing me sitting there he yelled at me why I'm not working. FU manager guy. That was the day I realized work now is WORK, not fun. You are not supposed to have fun. You now need middle manager person to keep your lazy ass in check! By yourself, without continuous pressure, you would not move a hand! Right?
At least for the "lower" jobs, which are the majority.
> It's normal, it's natural and it works. It's human (and animal) nature.
You are definitely not speaking for a lot of people, and what you see is NOT the one natural outcome. Expectations and behavior towards people determine theirs (behavior).
The culture I describe existed all around me in East Germany. Yes we were waaayyy backwards with everything, but work culture was really good. I learned a technical profession in a large chemical factory before studying. Everybody worked, useful stuff too, all day. The ancient machinery in the crumbling buildings needed a lot of attention to keep them running. There was hardly any slacking off anywhere I looked. Sure, it was relaxed, but it was work, work, work. I've seen waayyy more slacking off in the offices of large American IT companies.
What you describe as "natural" is natural only in the context the current society has created.
Yes we are. When discussing a salary offer, do you negotiate it down? When buying products and services, do you just pay the minimum amount asked or do you offer more from the goodness of your heart? When getting your paycheck do you immediately donate most of it to the less fortunate in Africa, keeping only enough to cover the bare necessities for yourself? If not, welcome to the club: you too are greedy.
> When I was a kid I LOVED working like the adults.
My kids loved helping with yard when they were little. Their reward was spending time with me and learning. It was enough then. Now, as teens, not so much. I have to pay to motivate them.
> Work was FUN!
Work is still fun, for me at least. But a paycheck makes it even better. I don't know anybody cleaning sewage for pure fun though.
> East Germany
I too grew up in communist Eastern Europe. I clearly remember the never ending lines for food and any basic items like soap or toilet paper. With the profit motivation made illegal, nobody did any work and we were all starving.
I agree with you but this website is sociopath central so I'm not surprised this got down votes. A lot of Ayn Rand fans here. But you know that already, judging by your karma score.
> ... would be fine if healthcare was a competitive market. But it isn't, and I honestly don't see how to make it one.
The "mixed economy" model - introduce government run hospitals to create competition.
Indian healthcare industry is experimenting with such a model. There are free to cheap government hospitals (along with medical colleges that provide cheap labour in the form of student interns) and smaller public health clinics, that work somewhat like the UK NHS model. But as they tend to be over crowded, or have high wait times to see experts, people with money (and / or insurance) tend to prefer good private hospitals. Private hospitals do charge a lot, but where there are good government hospitals, they have to be mindful that they do not charge too much. Affordable insurance (along with socialised government insurance) and medicines also make access to quality healthcare possible.
Huh, I really like this approach. My economics knowledge isn't great, but I do know that healthcare is quite inelastic because people are willing to pay high prices to be healthy. A mixed model would siphon off the most desperate to a good option, and inject local competition.
I advocated against universal healthcare for a long time, since I was worried that it would cause stagnation in health innovation, but now I see a need for universal healthcare for the 80-90% most common procedures (and leave private clinics to innovate). The only downside I can think of is less dependence on insurance, which has the potential to drive up premiums. But, if that means taking care of the poor for the most common ailments, then it's a worthwhile tradeoff.
The further you get from a perfect market, the less free market dynamics work. And even if they did, there's nothing in the theory that would minimize for patient deaths. The theory says that as patients die, people who are living would go to hospitals with better outcomes. But to achieve this outcome
1. patients need to be able to actually choose where to go. If they are incapacitated they have no choice in where they are taken.
2. we have to endure an unknown number of deaths for an undetermined period of time while we wait for the market to reach equilibrium.
So it's pretty clear free market dynamics are not the way to go when it comes to the healthcare marketplace.
In what sense do you mean that healthcare isn't a competitive market? Are you talking about locales with only one nearby hospital? I'm in a big city and I have 3 of them, and the choice of 5 different major provider chains. I don't like the system (I think provider abuses are the major cause of health spending problems in this country), but one thing I can't say is that I don't have options.
What I mean is that the dynamics of healthcare are not conducive for a competitive market.
Compare grocery shopping:
You have frequent/repeated interactions; if you always get ripped of by one shop, you can go to another. Before you go grocery shopping, you will have a decent mental model for: prices levels at each shop, quality of produce and accessibility/distance. You also have the full choice in where to go, basically every time.
Hospital interactions (especially ER) is the polar opposite:
You will have few interactions with it over your lifetime (hopefully), costs are basically impossible to know beforehand (and difficult to compare, too), quality of treatment is extremely difficult to judge as patient (because every case is somewhat unique, and outcomes can easily come down to luck/individual doctor). Especially in the ER case, you often don't even have a real choice of hospital and even in cases where you could (and had all the info) there might be throughput limitations on "desirable" hospitals that prevent you from switching (=> having to wait for 5 months).
Another factor I think is that hospitals gain less from being "good": As a "good" grocer, you get to steal market share from your competition at low cost and risk to yourself; for the hospital, scaling up is more difficult and risky, thus "good" competitors are also less threatening comparatively (thus less of a motivation to improve things).
So I understand where you're coming from, and there are certainly major market distortions in health in the US (employer-provided health insurance being the most obvious). But where I live, "which ER will you go to" is a major, market-driven conversation. I have 3 obvious options, and 2 of them are competitive, and if I go look for conversations and "reviews" I'll find plenty of opinions quickly. To me, it's at least as competitive as the market for plumbers.
> but I don't believe classical free market selfregulation can work out for the healthcare sector, by design.
That would come as news to the French.
The TL;DR of the French system is that you pay for your outpatient care at the point of service. Later, your insurance company will reimburse you for 80% of the "reasonable and customary" charges for the service. It's up to you to pick the provider that matches your budget.
Emergency care is understood as not amenable to the free market, and that doesn't have the same payment flow. Having said that, I could tell you some stories about folks who wound up worse off because the care was still rationed, just by the state instead of an insurance company.
I'll preempt the common next argument, and that is that emergency care is ~ 10% of US medical spending, so it's probably not Pareto efficient to start with that case when designing how this all works.
> I could tell you some stories about folks who wound up worse off because the care was still rationed, just by the state instead of an insurance company.
I wish this would stop being used like it's a credible argument. The truth is that we can find these cases in any healthcare system. The only valid evidence when weighing system versus system is aggregate numbers.
For the record: With "classical free market selfregulation" I mean something that is quite far from any civilized system. Standards of care, education of caregivers and even pricing levels to some degree are all regulated in your example (which I think is a good idea).
I would literally expect overpriced snake-oil from actual free market healthcare, and there is significant empirical evidence that this would happen from my point of view.
Restricted supply of physicians means that there aren't enough of them to open a competing hospital.
Your complaint against for-profit hospitals would apply just as quickly to a nonprofit hospital in a socialist regime. The fundamental problem is monopoly. Because most people don't behave nicely unless they are forced to by market pressures. Whether those markets are economic or social in nature.
Even if you ignore present-day socialist economies, you can look to NIMBYism in the developed world as a flagrant example of what happens when "normal people" gain collective control over a resource without any competitors. They immediately weaponize it to the harm of greater society. If not for financial purposes, then ideological ones.
I stand by this: Physicians in the US are some of the only people who are paid what they deserve, in terms of authentic human value delivered. And only in the US are they paid what they deserve. They deserve their semi-monopolistic trade union.
Admin bloat is a far larger problem, and so are the pharmaceutical companies which get to charge the government whatever they want to develop new drugs that often are only marginally effective.
I appreciate the defense of doctors wages for great work; I would agree that many doctors absolutely deserve it and more.
But this "semi-monopolistic trade union" not only inflates their wages (which maybe that's a good thing), but it also harms the lives of the population they purport to serve. Many (most imo) people in the US simply cannot afford the monopoly's prices, and the monopoly has little incentive to innovate. This cartel of doctors actively prevents lower-cost, more efficient alternatives from coming to market.
Linking blog articles that bury the lead behind paywall make it impossible to discuss anything.
However, at the core, US insurance system is the problem because it gets compounded by government trying to regulate such a system, so people do not die needlessly, but not destroy these profit seeking enterprises. So, what you end up with is a massive mess that leaves everybody cranky.
I'd have no problem if they were just a trade union. In fact they are a systemic machine of mass violence, capturing the regulatory apparatus of government to use men with guns to enforce their licensing regime which of course you must walk through the pearly gates of their institutions to be blessed under.
It obviously is. A federal government policy decision caps the number of doctors we have, and another federal government policy decision restricts a huge number of basic medical services to those doctors.
When the government accepts AMA lobbying and sets a regulatory cap on the number of new residencies, it is regulating, and is fully culpable for doing so. Your logic basically defines the government away, treating it instead as the product of the influences acting on it.
> sets a regulatory cap on the number of new residencies
there is no regulatory cap on the number of new residencies
there is a cap on _federal funding_ for new residency slots; yes that impacts hospitals' willingness to add new positions, but it's _not_ the same as a regulatory cap
What kind of issue it is then ? If a regulation permits the doctors associations to set the allowed number of doctors residency, naively it is a regulatory issue.
It's a funding issue. There aren't enough residency slots available given the number of medical school grads. Residency is a requirement to get a medical license--which is issued by the states, not the federal gov. The reason there aren't enough residency slots is because they are heavily subsidized by the federal gov and they put a cap on the funding. No one else wants to foot the bill, so the slots remain limited, thus the licenses remains limited.
Since the government (federal or state/local) authorizes those organizations to certify physicians and restricts medical care to only those who have been certified, it is.
- The AMA froze the number of med schools for decades even as residency availability increased.
- The majority of states still maintain "certificate of need" laws for new hospitals, ambulance providers, etc.
- The AMA holds a state-enforced monopoly over physicians.
- Many states still limit NPs/PAs, requiring physician supervision for things for which those people were trained.
- Lack of interstate reciprocity in licensing means mobility is constrained and supply can't follow demand.
- Costly medical equipment usually requires first-party repairs; mfgs claim a third-party modification (repair) constitutes remanufacturing under FDA regs.
- Stark law makes e.g. physician/hospital value-based care arrangements very hard. It's quite strict and everyone has to tiptoe around it a bit.
There's also the huge problem of malpractice insurance costs due to insane tort settlements. Awards need to be capped yesterday because it's too easy to talk a jury into bankrupting people over things that legitimately just sometimes happen.
I'm guessing others could give you an even better list. Some of those are a bigger deal than others but it's a huge issue. Insurance net margins just aren't high enough to blame it and drug costs aren't enough of our total healthcare spend to be at fault.
It comes down to humans being too expensive. There remain many areas of care where we can't cut man-hours down without sacrificing safety and quality. As such, we should reduce the insane byzantine co-ordination and compliance overhead.
Don’t forget that the AMA has a monopoly on billing codes. Medicare defines the billing value of every procedure as Relative Value Units (RVUs). Then Medicare defers to AMA’s guidance on what these values should be. Insurers default to RVUs x multiplier. So the AMA has the ability to set prices.
Oh, and patient value isn’t considered for these units. They are explicitly defined as input driven, so a procedure that is less costly to perform but has higher value to the patient will be billed at a lower value. Hospitals are incentivized to choose procedures that they can bill at a higher rate, and so because of these perverse incentives, they necessarily will ignore cheaper more effective treatments and choose the more expensive ones.
I’m a lefty, but the older I get the less I believe in the old New Deal style leftism I’ve been sold my whole life. As systems get more complex, they simply become a way to obfuscate oligarchic control.
As someone already pointed out, PE owned hospitals are in states with, and in states without, CON requirements. Certainly on the face of that fact it would appear the existence, or nonexistence, of CON requirements has no effect on PE hospitals charging more and having far inferior outcomes.
Do you have a hypothesis as to why CON requirements are driving inferior outcomes and increased cost metrics at PE owned hospitals? (A hypothesis that accounts for the fact that PE owned hospitals underperform even in the absence of CON requirements.)
Serious question. I'm trying to get my head around this.
Sample hypothesis with only minimal amount of knowledge on it.
PEs seek to make profit, and are looking for places where they can either raise prices or lower costs (which will quickly correlate with worse outcomes) while not losing customers (yes, you could call them patients, but PE will view them as customers), or at least losing so few that the overall numbers result in more profit. One way of doing this is looking for barriers to competition/moats. CON is just one type of moat, and so is one factor PEs evaluate, but the presence or absence of other moats can still override the presence or absence of this one moat. One could try to work this out from data with some sort of regression, but with so many possible moats and a relatively limited number of data points, it would be easy to overfit the data.
In comparison, non-PE hospitals might have some profit motive (or keeping to budgets, not going bankrupt, ect.), but will be less driven by this mentality and thus their relationships to moats will be more complex, and so something like a CON requirement won't be as fully exploited to raise prices or lower costs.
This also fails to account for other ways that PE can seek to make money, which involves more complex parts of law and financing that I'm not well versed on (I've ready some things about real estate, but don't know enough to fairly analyze the claims).
How does this relate to the original post? The original post posits that overregulation contributes to the dysfunction of the US healthcare system. The next response calls for specifics. The comment you responded to provides a specific regulation that may be contributing.
You respond questioning how that could explain why PE operated hospitals have worse outcomes. I agree, this doesn’t seem to have an explanatory power for why PE operated hospitals have worse outcomes, but how does that relate?
Uh, because the original post implied that over regulation was the cause of substandard metrics in PE owned hospitals. It even went so far as to state, "..I'm not surprised by this finding.." after outlining a case for why over regulation was a problem.
Which "finding", presumably, being that PE owned hospitals have substandard metrics.
My question is natural given the context of a discussion that's literally titled:
"Death rates rose in hospital ERs after private equity firms took over"
It's literally the entire subject of the discussion. Why would anyone think it's irrelevant?
I think you misread the original post. It is about overregulation fostering the spread of PE operated hospitals. Not about overregulation causing PE operated hospitals to have worse outcomes.
Yeah, don't you think a. there would be less PE demand for these hospitals if they didn't come with a free state-enforced local monopoly, and b. it would be easier for competitors that don't suck to open up, and c. PE guys could get away with less quality degradation if there wasn't the aforementioned local monopoly?
Let nurses do more, let them write some prescriptions, let them open up a shop that puts casts on people with broken bones and minor things which they mostly do anyways.
Another issue is the requirement that doctors adhere to "standard of care" regardless of cost. If they don't, they are subject to malpractice lawsuits.
Elsewhere, quality of a good or service is traded against cost. But in medicine, there's a cost ratchet as ever more expensive and marginally more performant treatments are introduced.
This is another example of a requirement that both PE owned and non PE owned hospitals, presumably, followed.e (I would hope neither of them were ignoring standards of care in the treatment of patients.) Yet the metrics are substandard at only the PE owned hospitals. So you would need to outline how this requirement unduly burdened the PE owned hospital relative to the non PE owned hospital for it to be the cause of the discrepancy.
There may be such a reason, but you haven't outlined it in your post.
This doesn't solve the issue presented in the study. PE hospitals exists in states with and without these restrictions. So while CON might be an issue, it doesn't reconcile the issue of PE. In fact, PE priorities is exactly one of the things CON was setup to handle.
Regardless, you have to explain how removing CON solves the PE issue mentioned when states without CON had the same issues.
- There is a specific list of regulations that cause the problem
- Each regulation in that list is present everywhere the problem exists
Neither one of those are true. Instead, there are many regulations and, combined, they add up to causing the problems. The specific regulations can and do vary by location; but the result is the same.
I think the problem is obsessive optimization of profit at the expense of literally everything else. Greed is bad, especially in a field that is at least in theory centered on taking care of people. You can't take care of someone by exploiting them for the maximum possible profit.
The context of this discussion is PE. So comments discussing this involve PE. So while you are correct in general, you are wrong specifically.
In light of that, I stand by what I said: you have to explain how removing CON solves the PE issue mentioned when states without CON had the same issues.
Maybe this isn't possible, but then we accept that this is not an answer to PE, which again, topic of conversation.
Oh, well that's BS. Urgent care clinics have proliferated like crazy over the post decade or so. The supply to fill the vast majority of urgent medical needs which hospital ERs used to have to carry alone is there. But it's true that that supply often goes unused. Why? Because ERs HAVE to tend to and stabilize patients when they present; UCCs can turn you away if you can't demonstrate the ability to pay.
The problem is not restrictions on medical facility construction, it's inefficient use of what we already have.
In general, America has an issue with defaulting to "building new", as if we have an everlasting greenfield, rather than careful provisioning of the already overbuilt infrastructure base. Capitalists love being freed of prior obligations, with no regard for how they contribute to an even more unwieldy set of obligations in the future. Enough. You can't just do as you like. Help solve the actual problem.
Yeah, that one actually fucked us over rurally. Local healthcare system wanted to put up a new greenfield hospital facility, was turned down for the CON by a challenge from another hospital 30 miles away. They wrenched demands out of the facility to get the CON approved with modifications that basically took away all of the “hospital” from it and basically made it “fancy block of specialist doctors” instead.
Rural/urban split. Many cities instead contend with local politicians who want to put a feather in their cap by giving concessions to developers to build new, expensive facilities (instead of, say, driving that money into actual healthcare or the rehab of existing facilities). What will happen is that the taxpayers will give millions to have a greenfield facility built, and around that time, the older local facility (likely to be servicing poorer residents or those without transportation access) will get shut down. Expanding building doesn't fix this dynamic, it makes it worse.
Yes, BS. Because, as I said, regulations have not stopped the establishment and proliferation of the urgent care clinics that would be intended to reduce the load for hospital emergency rooms. Such facilities do not need a CON if affiliated with an existing hospital or practice. They essentially function as extensions of local ERs for non-critical needs - or, they would, if they were forced to see patients regardless of demonstrated ability to pay, as ERs must. To fix that, you need MORE regulations, not fewer.
Slightly more than half have CoN laws and other states have a number of restrictions of facility construction that complicate building smaller clinics.
No, actually it would be lower for the same reason competition always leads to lower prices. Uncompetitive hospitals that can’t meet need would naturally go out of business.
A “need” certificate is similar to the cap that med schools have - it’s effectively a pricing cartel to keep salaries/revenue high
There are extremely high fixed costs + we require hospitals to do unprofitable work (they aren't allowed to turn anyone away from the ED, for example). In many small regional chains, their profitable hospitals in one area fund unprofitable hospitals in other regions.
Overall we have a crisis of hospitals shutting down, not a crisis of oversupply.
Hospitals typically lose money on emergency visits and make it back on scheduled inpatient care and outpatient services. This would accelerate a poor performing hospital's demise, because ambulances will go to the closest one but patients who have options will look elsewhere.
If you now have two ERs within driving range, you have the choice to go to the cheaper one if you are conscious and in a stable enough condition to reflect. This is the sort of thing people already think about in the US.
But the victims don't have to pay for it -- excess infrastructure is a bad investment that those who built it pay for. The builders are not guaranteed a return on their investment.
If you are arguing that the customer is not paying for inefficient providers, then I strongly disagree.
Customers always end up paying for inefficient supply chains. If you end up with an inefficient allocation of hospitals/doctors (local overprovisioning), it's always gonna be the patients that are gonna pick up the bill for this in the end through higher average prices.
Inefficiencies are doubly bad because you potentially don't just pay the pure cost for the inefficiency (middlemen, waste etc.) you even pay for margins on top.
I think the assumption that such inefficiencies could lead to actual savings for customers (by magically making the providers decrease their profit margins) is highly overoptimistic.
> Customers always end up paying for inefficient supply chains.
Obviously not. There is nothing that compels a customer to do business with an inferior competitor, if there is an alternative. The end result of having a sufficiently inefficient supply chain can be that the company involved goes out of business, as it cannot operate at a profit.
1. One accepts only Visa, one only MC, one only Amex, one only cash, and one only accept bitcoin.
2. One offers bananas to walk in visitors, but the others have a minimum wait time of 1 month to a year.
3. One is a mile away. One is an hour away. Still in the same county.
4. None of them offer an easy to understand menu. You can't just order a banana. You ahve to order Banana Services and meet with Banana specialists. You can't take the banana home.
5. You wake up in a banana shop and you didn't get a chance to shop around before being presented with a bill. They don't take your payment of choice, so it's 10 times as expensive.
6. Some won't let you buy a banana. Instead, you have to buy a banana service. Per banana pricing is the lowest here, but the total cost is higher if you just want a banana.
Which banana store do you buy from? A, B, C, D, or E?
I'll take the first choice you make and let you know if you picked correctly. Anything other than the correct choice is a failure.
> Where would you expect bananas to be cheaper: a town with five grocery stores, or a town with one?
I'm not defending the "Certificate of Need" regulations, but your thinking is sloppy: healthcare is not a product like bananas. That analogy will mislead more than it will inform.
If every person has to buy 10 bananas a day or they will die, the town with 5 stores may have more expensive bananas, because they can just raise prices to cover the excess capacity and people will pay.
They can't just raise the prices because people will bring their business to the competition. I've personally done this for CT scans. In my local market we literally got a scan for 2k where the hospital we'd usually go to wanted 10k.
The same works for non-emergency surgery as well. Take a look at https://surgerycenterok.com/ it's such a breath of fresh air to see the full price for each procedure right there. People travel there from all over the country to get needed procedures. So competition clearly works but the system doesn't really enable it. For example insurers don't want to work with the linked center because they won't give them rebates but charge everyone the same price. More details: https://www.econtalk.org/keith-smith-on-free-market-health-c...
> They can't just raise the prices because people will bring their business to the competition.
Not necessarily. They're all under the same pressure. If they all provide similar services with little differentiation, the price will probably settle at a higher level to cover the fixed costs of 5 stores instead of 1.
> In my local market we literally got a scan for 2k where the hospital we'd usually go to wanted 10k.
You kind of get at it below, but I wonder if that's an effect of insurance negotiations (e.g. the hospital you usually "usually go" gave in to insurance discount demands in one area, but pushed back on scans pricing to get the revenue they need to operate).
I do think the totally fictitious nature of posted healthcare prices is a serious problem.
You are over simplifying the problem. First off, the place you quote at 2K is probably an imaging business or part of a larger business that can keep the machines more fully utilized. The hospital has it's equipment to support it's main business. Nobody is going to the hospital for routine imaging. Next, nobody pays $10K at the hospital. Insurance will either have an already agreed to rate or will negotiate it down. As a private pay patient, you can negotiate it down. For planned imaging, a lot of people still won't shop around. Even with a deductible, it should still be the negotiated price. After deductible they all cost the same for most people on insurance. Modern Healthcare isn't a free market. These days insurance has most of the power.
If we look at "food" more generically, rather than bananas specifically, we are literally in that situation where every person has to have X amount per day or they will die. And competition still works great.
There are two things that set healthcare apart here. One is that sometimes people need unusual treatments to stay alive that are extremely expensive, and our desire not to let people die is at odds with the normal market mechanism where products that cost too much just don't get purchased. The other is that sometimes people have emergencies so urgent they can't really choose their provider.
But the vast majority of healthcare doesn't fall into those categories, and normal market mechanisms work fine for those. Competition would lower prices for most healthcare just like it does for food and everything else.
Unlike grocery stores, hospital ERs don't get frequent repeat customer interaction, so that makes the competition aspect basically completely inapplicable.
As typical ER visitor,
- You wont know what "quality" of care you are going to get beforehand
- You will have very limited capability of selecting the hospital
- You will be unable to compare prices beforehand
So why would any of those 5 hypothetical hospitals decrease prices?
More competitors won't do shit if the market is uncompetitive by design.
>Unlike grocery stores, hospital ERs don't get frequent repeat customer interaction...
Oh yes they do. I can think of any number of patients I'm familiar with who end up in the ER multiple times a week. Practically daily for some people. And a few who are known for getting discharged from one hospital and immediately heading to another nearby one.
What is a reason to end up multiple times a week in ER?
I have a bunch of people with serious conditions in my "bubble" (spontaneus penumothorax, diabetes, ...) and none of those needed the ER more than ~1/lifeyear.
If weekly hospital visits were typical, competitive free market hospitals would be more feasible IMO but I don't think we're close to that (and I don't want to be, either).
Addicts (usually but not always homeless) with all sorts of drug/alcohol caused health problems that they don't manage. Not to mention overdoses/too drunk to move.
Medically fragile elderly people trying to live on their own when they shouldn't be. Frequent falls with injuries, etc.
A friend of my mothers was in and out of the ER and med/surg floors for months with mysterious cardiac symptoms that ended up being a new reaction to a medication she'd been taking for years.
People who are just psychologically, hmm, needy and looking for attention. When I worked on an ambulance there was a lady who'd call weekly because she said her blood pressure was high (it never was) and we couldn't refuse to transport her.
What is a reason to end up multiple times a week in ER?
This happened with a friend's mother during her last year of life. She had dementia, cardiac problems, infections, breathing problems, a whole litany of symptoms of slow death. But she didn't have any one clearly terminal condition (like late stage cancer) that would justify a switch to hospice, so she lived in an assisted nursing facility and also had to go to the ER more than 70 times in that last year. It was horrifying for everyone and the costs were astronomical. The state is now trying to seize her daughter's house to partially offset the accumulated expenses.
If you go in because of a killer stomach ache you could end up needing a CT and emergency surgery. Or you could end up getting some pepto-bismol.
And if you are taken there by an ambulance (which you also have no ability to compare any price to). You'll be sent to the hospital the paramedics decides to drop you off at.
There is an inherent complete lack of information when going in for a medical situation that can't be fixed by the free market. You need (or believe you need) treatment now. There's no way for you to know what that treatment will be.
Even going in for an annual physical can be the exact same. Some dicey numbers on your blood work and you might be looking at some huge unplanned bills that are completely unavoidable.
Number of competitors is only one of the inputs for how competitive a market is, and price intransparency + lack of information on treatment quality make it moot for the healthcare sector in my view.
I don't think higher hospital density would hurt, but we would have to pay for this and I don't see it help drive down prices.
An ER is only a small part of what a typical hospital provides. And life-threatening, must-get-treatment-immediately-or-die emergencies are only a small part of what a typical ER provides.
Yes, there are some kinds of care that aren't very amenable to competitive market forces, but the vast majority is.
For every emergency I plan a visit to the hospital at least 10-20 times. Emergencies are the exception, by definition. I think everyone with health insurance, which the Census Bureau says is 92% of Americans, since they will not go directly to the ER.
The labor to produce, ship, and shelve the banana determine it's cost along with whatever margin the store that sells the banana is willing to take. Walmart, for example, could be perfectly willing to sell a banana at a loss if they think that will get you in to buy a TV.
This is why dollar stores exist and often kill off local grocers. They can sell a lot of non-perishable goods at a loss and win back by understaffing the location and overcharging on non-perishable goods.
I live in a city with probably around 50 different clinics, but they are all associated with 3 major medical groups. It isn't a lack of buildings that's preventing competition.
My expectation on cost of banana will be more on how much it costs to ship to said town? Similarly, which town has higher tax burden to cover? Assuming any sort of health inspection on places that store food, the town with more stores has a higher burden.
Which is all to say, my gut is it is far more complicated than that allows for. Not a useless model, but also not a very actionable one.
Exactly. The more suppliers are in a market, the more competition there is. Thus lower prices and a better selection. People don't like a monopoly is other areas of life. Healthcare is no different.
The town where you can see the banana prices on the shelves, if not online, and where there's a collective refusal to pay (perhaps through an organizer payer) if the price is too high.
A town with ten people won't have five grocery stores in the first place. Nobody's going to spend a bunch of money to open a store in a place where there isn't a customer base to support it.
The point is that business decisions aren't magically correct. People can, and do, open stores in oversaturated markets. When your cupcake shop flops, that's sad; when hospitals close, that can be devastating to a community. It makes at least theoretical sense for states to try and prevent that impact.
Avoid the impact from hospital closures by preventing them from opening in the first place? Hospital closures are devastating if they're the only one in the area, or remaining facilities don't have enough slack. They aren't devastating in an oversaturated market.
That's like saying "it's ok if I shit in the river, it's a big river". When a million other people do it you've got a water quality problem.
Each and every one of these regulations can in abstract, be justified by some useful idiot looking at only the first and second order inputs and outputs and not looking at the totality of the effects.
Nobody with a brain would defend shitting in the river, but here you are asking for individual turds so that they may be justified on the basis that the individual dropping them was relieved and their individual impact on water quality was minor.
No it's not. Shitting in a river is always a net negative. Regulations can be positive, negative, or ineffective. Trying to "just count" the regulations to determine quality completely discards this critical dimension and betrays an almost childlike view of the world.
It beats anything open air by miles. Sure, an outhouse would be better but river > street.
>Trying to "just count" the regulations to determine quality completely discards this critical dimension and betrays an almost childlike view of the world.
You're grasping at straws here. I am under no obligation to give such an infantile opinion (the one I initially replied to) a response at length. This is not the venue for such minutia.
What, specifically? Just abolish them all, and return to the pre-1938 status quo (e.g. marketing radium water to cure what ails ya)? Or specific reforms to make the drug approval processes more effective?
Best way to make the entire process more efficient would be centralizing R&D and approval and nationalizing the manufacturing of drugs. MAYBE you could license out the rights to produce drugs on 10 or 20 year license agreements.
Turn it into a pure R&D effort and not one driven by profit.
Who is gonna decide how the R&D money gets spent? What's their skin in the game and their feedback mechanism? Why will they do a better job picking what to research than current pharmaceutical companies?
> Who is gonna decide how the R&D money gets spent?
Same way the NHS previously funded medical research. Grants and grant review. You can expand that department and effort.
> What's their skin in the game and their feedback mechanism?
Believe it or not, some people just want to research and look into cures for diseases. Shocking I know. Feedback can be reviews of their work and blackballing bad actors that consistently kick out bad research.
> Why will they do a better job picking what to research than current pharmaceutical companies?
Because they already are. Pharmaceuticals aren't doing the majority of research, they are taking NHS funded research and running it through FDA approval.
Ozempic, for example, didn't come from pharmaceutical research, it came from grant research into lizard spit.
I used to believe in the efficiency of publicly funded research, especially for things that have no direct path to economic returns. My canonical example used to be particle physics. It promises incredible breakthroughs but commercial application is faaar down the road and the risk profile is crazy. The Sabine Hossenfelder convinced me otherwise: https://youtu.be/htb_n7ok9AU?si=fJ7B8QALLm3Vy-_W
I don't think we should cut all public funding for research, but we also need private research. While semaglutides were discovered in Gila Monsters a long time ago it was Novo Nordisk that put in many years of leg work to actually turn it into something useful for humans. The more interesting argument might be that Novo is controlled by a non-profit org.
> Who is gonna decide how the R&D money gets spent? What's their skin in the game and their feedback mechanism? Why will they do a better job picking what to research than current pharmaceutical companies?
Pharma companies are pretty terrible (e.g. pricing a cure for a kind of hepatitis just under a liver transplant, not because it costs that much, but because they can make the most money that way even though access is severely restricted). Getting rid of that market-driven terribleness may be a enough gain to justify the reform.
Personally, I'm so sick of the business-all-the-things approach and its well-known failure modes that I think society needs to put some effort into making other models work. Either straight up nationalization (with perhaps internal competition between research centers), or stricter oversight (e.g. putting government officials, patients, etc. on pharma company boards with enough power that the shareholders have to take a back seat).
I summarize it with one word after talking to a hospital billing manager. Subsidized costs. If you cant pay someone else will be receive marked up prices. On top of that and bear with me, but the way health insurance works feels like you gotta be in the right “mob family” where each provider is different in leverage in conjunction with which employer you work for. They can just take hospitals out of their “network” if they dont lower costs, so small businesses dont get this level of leverage, but employers with large numbers of employees do. You could have someone with a drastically lower bill just because of where they work, not even related to how much they make mind you.
It all goes back to your healthcare costs being subsidized by those who are left with the crappy end of the stick. I think transparency in hospital billing is drastically necessary. If not for every single surgery out there at least for all the really standard things that arent so complicated.
I am not a doctor. I think healthcare can be fixed without throwing more government money at it, but we need people to understand it better and work out how to bring costs down.
If you are not aware yet, if you think you need to go to the ER think about what you NEED, is your arm broken? This sounds crazy but find a lab that will xray your arm. It will cost way less, and sometimes the insurance will pay the full cost of labs for you since you saved them a fortune. It sounds dumb, but it could save you so much financially. If you are in more urgent needs dont waste any time go get the care you need.
If you are not aware yet, if you think you need to go to the ER think about what you NEED, is your arm broken?
Just noticed this comment. Wow, free ideology seems to turn people into monsters. "No you" (in kids voice). You diagnose your own heart-attack/kidney-failure/etc. I'll take a professional.
What I mean is, is it something where you know you need an xray, but arent like bleeding out, etc if you're unsure, just go to a professional, but if you are 100% confident you can save yourself the headache of hospital billing, definitely do.
No one is 100% sure of medical diagnosis, jeesh. Quite a few people ignore the symptoms of serious diseases until its too late and others go in for minor things.
Not even medical doctors can sure of a diagnosis, where of themselves or others. And the average person lacks the knowledge of a doctor.
I disagree with your analysis. I think you are wrong.
Health Care is a natural monopoly like an electrical system. Basically, a large portion of health care the creation of infrastructure that everyone benefits from. An MRI machine or whatever is benefit to everyone since everyone might need it even if only some people actually use it, etc.
For that reason, the cost of procedures, infrastructure, etc, etc. are infinitely debatable and there is no true way to way to assign costs. And sure, the actual assignments are irrational but framing this "things are subsidized" has things exactly backwards.
Here's scenario - suppose electrical companies weren't responsible for maintaining their own grids and homeowners had to individually maintain insurance in the event of a pylon going down. Suppose if you didn't have insurance and could be tagged as the last user of a substation, you could in-hoc for the entire cost of repairing a pylon or whatever. This would only approach the irrationality of private medicine but I think it illustrates the situation. (and the finance system might manage to put that in place too if we're not careful).
Why are we talking about deregulation when the topic is the ill effects of unregulated rentier profit seeking behavior of PE firms? We need to make debt loading and dividend recapitalization of hospitals illegal. Let them hollow out Neiman Marcus and Dunkin doughnuts, I don't really care. But financial engineering should have no place in our healthcare system.
"Regulatory capture" is a nice euphemism for the problems that a corrupt political environment creates. It is corruption that really hampers the creation of a fair and competitive capitalistic market.
Regulation can indeed be balanced to create a fair and competitive capitalistic environment. A great example of this was the telecom industry in India during Dr. Manmohan Singh's government. Both the economic and telecom policies created a very booming and competitive telecom industry in India, with many foreign and local businesses trying their best, to be the best. It also ensured that the technology was accessible and affordable to all, providing a further fillip to the indian economy that increased connectivity delivers in a society. Contrast that 2+ decades later with the current telecom industry scenario in India where only 3 major private players (and 1 government owned company) survives today due to flawed and corrupt policies of the Narendra Modi government. (As the government owned telecom enterprise now doesn't really "compete" with the private players, the 3 private players have already formed a cartel to dictate pricing, and keep gouging the public, with increased pricing, with the connivance of a government that believes in oligarchy vis the South Korea Chaebol model).
And let's not ignore that regulation is necessary in a democracy because capitalists are only (rightly) focused on creating capital. But obviously they are not the only contributing members of a society (nor, do I dare say, the most important ones) and the rights and needs of others in a society are just as important in a democracy. That is why everyone today also realises that things like monopoly, hoarding or black marketing, for example, aren't good for the overall well-being of a society, even if that's how capitalists can derive "maximum" value (i.e. make the most profit). History says that imperialism is the capitalist model that delivered peak "efficiency" in terms of deriving the maximum "value" for the (low) capital invested in it. But obviously, imperialism, even in its limited form today, is not compatible with democracy or concepts of sovereignty.
The problem in the US is there are too many rich people devoid of morals and less rich people who support them and are brainwashed into ideological opposition of most or all regulation and government without nuance. Furthermore, Americans in aggregate condone being ruled by extreme inhumanity, corruption, stupidity, and greed by lack of effective objection. It's like an old-school third-world country and Americans either don't realize how bad they have it or lack the courage to do anything about it.
My impression is a lot of US health care problems are caused in part by a sort of unholy combination of restricted competition and access, together with profit driven market participants.
That is not wrong, literally stated. But know a lot of hn people imagine that this means making things completely unregulated might be one reasonable alternative. The obvious problem in this case is scams and unsafely/deadly treatments. Here, one can point countries with functioning, lightly regulated systems. The problem is that these countries depend on cultural and institutional factors keeping people honest, keeping fake medicine at bay, and etc.
But the US has a cultural of religious irrationality coupled with huge, profitable and predatory organizations (the ones soaking health care dollars as well as alternative medicine cults and scammers). Before the last hundred years of regulation, 1910 or so, unregulated US medicine was a deadly, heroin soaked shit show and if you back to that, all the "alternative" scammers along with Stackler types are ready to jump in to try to equal that situation.
Yes, or government intervention that looks good on paper and disastrous in practice.
Somehow people have this notion that healthcare should be treated differently than other service industries.
I would argue that the least amount of government control yields to the best result. There is only the size limitations (antitrust) that had potentially good outcomes. We could simply ban m&a above a certain size and make the externalities have an impact on revenue and that would be probably enough.
Somehow US citizens have this notion that healthcare is a universal problem and that US-problems are not self inflicted.
Everywhere else in the civilized world, you pay less and have better service. The US has the highest degree of industry meddling, most middlemen cashing out and the least governmental regulation. You are objectively being lied to.
One popular approach to saving money is to replace physicians with nurse practitioners and physician assistants, who have less education and training. The article does not discuss this element, and I'd be interested to see if that is a factor in patient outcomes. There's less data on this than you might expect.
ETA: From my post lower down, adding for visibility:
[The training gap is] quite a lot more than a year - in primary care, it's more like four additional years of training for physicians, and 15000 supervised clinical hours for physicians (vs 500 to 1500 hours for NPs). The gap can be wider in other physician specialties, because many have longer residencies than the primary care programs. For example, child psychiatry training is four to five years (depending on the route you take), making it longer than the three years of family practice residency.
I unfortunately have had to be in and out of medical offices and hospitals recently - and I feel like compared to 10-15 years ago practically everyone I deal with is a physician assistant. Nothing against them but it's kind of annoying that it's almost impossible to actually talk with a doctor anymore.
I get it they're probably overworked too and their time is valuable but it's not quite as reassuring not actually interacting with doctors very much. The few times I have it was literally for my actual surgeries and surgery pre-appointment. Practically everything else is some assistant.
It’s at the point where we might as well be seen by a CNA who takes blood for the blood test and have the AI assess it (you were too soon my dear Elizabeth Holmes). If we were to just measure the situation, how can we say first-level medical care got better if people are literally no longer seeing doctors?
What does that look like in a more intensive hospital setting? I've seen the shift to midlevels happening in primary care, but I'm not sure how that translates to inpatient settings - I'm vaguely aware that there are rules around when a PA/NP must consult an MD before making a decision, and I feel like they would encounter those situations way more for an inpatient.
Many states now have unsupervised, independent practice for PAs and NPs from the first day they are issued a license. There is variation by state, however, and some still require physician oversight. The amount and quality of that oversight also varies considerably.
Don't worry, MAANG-affiliated startups backed by private equity will work on a way to replace MD/DO/FNP/PAs with AI chatbots so patients can have the full Idiocracy experience while paying zillions for the privilege.
The next step is going to be turning over primary care to AI. Doctors will be mostly reviewing cases or consulting when the AI decides it's sufficiently nececessary.
I mean we are talking what another year in school? Surely those outcome differences are gone once the nurse or pa is in the field for a couple of years.
It's quite a lot more than a year - in primary care, it's more like four additional years of training for physicians, and 15000 supervised clinical hours for physicians (vs 500 to 1500 hours for NPs). The gap can be wider in other physician specialties, because many have longer residencies than the primary care programs. For example, child psychiatry training is four to five years (depending on the route you take), making it longer than the three years of family practice residency.
I have a family member who is an NP and her biggest complaint is 20 years ago, most NPs were RN who had 5+ years of RN experience then returned to school vs current Undergrad -> NP -> licensed cutting out that practical experience. You think NP would be better if licensing required certain amount of RN clinical time?
Or how about - train more physicians. It is one of the most critical and in-demand professions yet the most artificially gatekept. Doctors will endlessly compain about working conditions and patient load but still not agree to this because they know it will devalue their own labor.
Major medical organizations have been advocating for years for more physician residency spots. Unlike NPs or PAs, some residency is required for physicians to be licensed.
Right now, there are not enough residency spots for every US med school graduate.
The AMA very successfuly lobbied to reduce the number of medical schools, cap federal funding for residency and cut the number of residency slots 20-30 years ago, and we are now dealing with the fallout of that. It has softened its stance in recent years, sure, but even if we fix all of this today (doubtful because of the usual political gridlock) it will be another couple of decades before the situation will actually improve.
Usually when a company sells to private equity, it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option.
That is often not true. My former dentist had a nice family practice that made very good money. Then a PE company came in and offered a ton of money which was an offer he couldn’t resist. The PE slowly took over more and more small practices in the area until they had a significant market share which allowed them to raise prices and reduce service. Patients didn’t really have anywhere else to go. I see the same happening with vet practices. The big corps are buying more and more small practices so you basically have almost no other choice than paying higher prices.
> Then a PE company came in and offered a ton of money which was an offer he couldn’t resist.
He is going to retire sooner or later and what then?
There is a cultural paradox where it's socially unacceptable to profit too much from a necessary good or service, but you can profit as much as you want from non-necessary goods and services. In the past, this pressured small practices to keep their service standards high and prices relatively low. However, due to the accessibility of information and finance, rather than start your own medical practice, you can become similarly wealthy with half the work just by being employed as a doctor/dentist and investing your money in an ETF. Of course, people with money swoop in to "correct" the mismatch in supply and demand, which leads to worse service and higher prices.
The knee jerk reaction people have towards these situations is to "punish greed", but that doesn't change the underlying market forces. Much like rent control, it may work in the short term but makes the problem worse in the long term.
> Usually when a company sells to private equity, it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option.
private equity being able to offer more money for your practice when you retire than a dentist who would have continued the small practice is not financial hardship or being unable to find a successor, so please don't pretend your two comments are equivalent.
This comment is much more honest: there was room for financialization, so people did it. They were unable to find a successor who would pay more than a group of people that wanted to wring money out of their company. Gives the lie to the "selling to private equity would be the least bad option" conclusion, though.
Sure you could voluntarily sell your business at less than its market worth to help a younger dentist, but someone else with the same net worth could donate the same amount of money to help the young dentist as well. Why is the expectation of social good placed entirely on you?
"it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option."
It should be
"PE offered by far the most money and will make up for it by raising prices and reducing service"
That's exactly what happened with that dentist practice. For years I went there, got a cleaning and was told "keep doing what you are doing". After the takeover they found some problem with almost every visit and fixing it coincidentally would have cost exactly the $1500 my insurance was covering each year.
As a first order approximation, closing down a nearby hospital and sending patients to one further away is only worse than PE if PE doesn't worsen care to such an extent that more people die there than would've en route to the other one. And most companies aren't about lifegiving care anyways.
The commenter spoke specifically about the lone hospital in an area. e.g. rural areas
Hospitals in those areas tend to not offer as high quality of care as most urban/suburban hospital.
When the only hospital in an area closes, it's not just a matter of going slightly farther out for care. In many cases, it's just not possible for people.
This is a big issue with the idea of socialized health care as it could happen in America. Right now we already have a two (or three) tiered healthcare system: one for the "rich" meaning urban and suburban and one for the "poor, remote, and/or rural".
When people talk about socialized health care they rarely if ever talk about how to keep such a system from getting worse.
So when a rural hospital closes down, you can expect a higher death rate in the local population. Not to mention the economic impact of losing what is probably the highest paying employer around and all the fallout that comes from that.
In common parlance, "private equity acquisitions" refer to B2C companies rather than B2B companies where there was never of stigma of financialization to begin with.
It's possible you're right as I'm also speaking based off vibes, but my argument remains the same. Those who sell out for a quick payout would eventually fall into the category of "the current owner is unable to continue to run the business and cannot find a successor" when they hit retirement age and their kids would prefer easier/safer/higher general market returns.
Like I said, I wasn't talking about random B2B startups, and you're going to hit retire age someday. I don't understand what you're arguing against. If we lived in a place that is hostile to "private equity", the majority of the companies you listed never would have been started in the first place.
Here is a few examples of PE shops and their list of portfolio companies. Please name all of the companies that fit the criteria of "the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor"
It's not a matter of anecdotes. All you have to do is look at what PE is. It's financial engineering done to increase EBITDA for resale. There is nothing in the PE model incentivising improved outcomes for customers.
PE gets a bad rap and for very correct reasons (especially at the large cap where financial engineering is rampant). However, there are a ton of examples where PE does add value and the customer experience improves. However it's impossible for me to list them because your definition of customer experience improvement might be very different than mine. So this point is generally very moot unless we can all agree on a standard quality metric for "customer experience".
Yes which is the definition of something that is very subjective. What you deem as "good value for the money" may be very different than mine...hence my comment.
I use ASP for my pool cleaning and they referred me to their electric company (Mr Sparky). Both have been excellent services and I was able to receive a discount on Mr Sparky, because of the existing relationship with one. Seems like a win:win for everyone.
Privatize the profits and socialize the losses, is this too difficult to understand of being the core motto of a private equity firm. A PE firm will not have patients at the top of their priority, unless legislation enforces and regulates that.
This is essentially just how capitalism works. Money is the only priority. So in ANY market where the financial incentive opposes human well-being, humans will suffer. That’s true in healthcare, where we’re often getting a worse product which is more expensive. While in other industries like consumer electronics, the incentives are aligned and humans are getting better products for cheaper.
The PE firm is a great representation of why monopolies eradicate the positive incentives in capitalism.
And this only happens after a long time and companies have had a chance to centralize vast amounts of money and power. Since there is no point that’s “good enough,” these massive companies are forced to continue growing by cutting costs (worse services, lower salary, fewer employees, closing locations) or doing absurd tricks like stock buy-backs to make their shareholders and executives very wealthy.
It’s literally impossible to avoid this situation without strong consumer protection and anti-trust regulation because the incentives for massive companies are so deeply unaligned with human well-being and society’s best interests.
We can either take strong action against massive companies or accept that this trend will inevitably get worse. It’s called late stage capitalism for a good reason
People assert all sorts of nonsense in response to questions like this, usually not at all backed up by the data. The drivers of high US healthcare costs are:
1. Doctors, nurses, and hospital admins make dramatically, *dramatically* more money in the US than anywhere except Switzerland. Every time a discussion of healthcare costs comes up, everyone tries to point their fingers at middlemen, but the middlemen extract tiny fractions of the revenue stream. Most of it goes to actual humans that are high status, and no one wants to imply they’re lobbying to lower the pay of these folks
2. The US pays for drug development for the entire world. You can call this the US “overpaying”, or the rest of the world “free-loading”, but the US is a very rich country that has decided to incentivize drug development by allowing drug companies to profit from their massive investments by setting high prices
3. Americans are fatter than the rest of the rich world (although the rest of the rich world is rapidly catching up) and chronic metabolic-disease is very expensive to treat (everywhere)
All the other factors are noise. Insurance companies extract a few percent, bureaucratic overhead extracts a few more percent. But to get to 100% more, these just don’t matter.
Worth noting in this context that the scarcity of doctors is artificial, due to a low cap on the number of federally funded residencies. We could also let more doctors immigrate. My understanding is we make immigrant doctors go through a lot of hoops to validate their foreign training.
For the last few decades the only way to find enough doctors willing to work in rural areas in America has been through H-1B. With the funding cuts in the "Big Beautiful Bill" and upcoming $100K visa fee a large chunk of Americans are going to find their quality of healthcare deteriorate very rapidly.
> ...bureaucratic overhead extracts a few more percent.
Respectfully, my perception contradicts this. My GF has been a psychologist for 25 years. For the first half of her career, funding for her work was provided exclusively by a state program (California), but about 10 years ago, the funding transitioned mostly to private health insurance. And it's been a bureaucratic nightmare every since. She had to hire a skilled/well-paid FTE just to manage the billing with the private health insurance companies. And it's still a nightmare to deal with. So yeah, to downplay the "bureaucratic overhead" of private insurance, is not universally accurate, IMHO. Maybe for big hospitals, it represents a small percentage of overheard, but not for smaller providers.
> There are no official data on their total size, but estimates extrapolated from micro-costing studies suggest that billing and insurance-related services alone comprise about 15 percent of health care spending, and total administrative costs may comprise about 30 percent.
re: your third point. Americans drive frequently and walk infrequently. It's the same reason why Canada and Australia have similar rates of obesity despite having vastly different approaches to healthcare.
I'm not going to bother fact checking a random comment without any sources, but regarding your second point: do you think "the rest of the world" gets drugs for free?
anecdotally, my cost (without insurance) for a prescription medication (for a family member) in Austria was less than my copay for the same medication with insurance (BC/BS) in the US.
It's not free, but it's shockingly less expensive, and there are cheaper countries in the EU than Austria.
It's not for free, though low enough to where no biotech company would make a profit on new therapies at the current R&D spend if the US paid the same rates that everyone else is paying today. This goes for firms on any continent, and a large part of why FDA approval is such a big deal for the international medical enterprise.
We could trade reduced innovation for lower prices, but that's a difficult ethical debate to settle given the prevalence of medical suffering from lack of effective therapies.
The solution I personally petition for is looking for ways to make drug development more affordable across the board.
> It's not for free, though low enough to where no biotech company would make a profit on new therapies at the current R&D spend if the US paid the same rates that everyone else is paying today.
Where are all the anti-taxes people on this apparent involuntary charity for the pharmaceutical industry?
Some of this may be correct but writing off administrative overhead as negligible is laughable.
Insurance companies spend a maximum of 80-85% of collected premiums on healthcare, and only because this is regulated by law, otherwise it would be even less.
On the other side hospitals, clinics and private practitioners all have dedicated departments and staff whose only job is to deal with billing and negotiations with insurance providers. That also costs a hell of a lot more than a couple percent.
So just adding up these two there's 15-30% of medical expenditure that isn't going towards actual care, just overhead. Recover this cost and the US will immediately fall in line with how much the rest of the developed world spends on healthcare, even with the high doctors salaries and drug costs.
This is one of those comments that make me wish hn gave out a daily use “super upvote”.
I’d only extend that point 2 is true for many cutting-edge treatments beyond simply drug development & is tied to point 1: If you pay doctors top-flight salaries, you get a lot of smart, innovative doctors pushing (at great cost) into the future of medicine.
Similar story with admins working to make care more efficient and also humane, data science teams (yes, big research and academic hospitals have these in spades!) …
America is rich and wants to spend that on medicine. It’s not a conspiracy of oligarchs.
There are definitely things in the system that drive prices up (like lack of competition (see CON) and middle men). However, a big reason you see this high cost and difference between countries is Baumol cost disease. Productivity and salaries in the US are very high. Meanwhile healthcare, like education for example, has seen very low productivity improvements. This leads to an ever increasing price. It's unintuitive because the healthcare workers didn't get more productive. However, they could be more productive elsewhere, so comp needs to go up to stay competitive with other options available to the workers. One might argue that nurses for example still earn very little, given how hard and important their work is but that's precisely what you'd see in areas affected by Baumol. The comp only gets dragged up to keep people from quitting or striking. There is little to no competition for something like a "10x nurse" because that's not a thing and the industry struggles to keep justifying their high prices while TV prices keep dropping and dropping and cellphones keep getting more impressive.
The problem is that it's an inelastic market. So sellers can basically charge WHATEVER they want, constrained only to the line where people will revolt. But that's a very high line in the US.
Health providing shouldn't be a for-profit endeavor. Certainly shouldn't be in the stock market and it absolutely shouldn't be comingled with "insurance"
> The problem is that it's an inelastic market. So sellers can basically charge WHATEVER they want, constrained only to the line where people will revolt.
What keeps me from bringing my business too the competition like I do in every other market? The main constraint I see right now is that there are very few, but large hospitals and my insurance only pays for me to go to even fewer of those. However, competition already works (if the patient makes an effort) for some planned procedures like CT scans where you can safe up to 80% in my own experience.
Definitely true. However, it's not intrinsic to healthcare. We made it that way. You can go to https://surgerycenterok.com/ and see all-inclusive prices for surgeries right now. Some people fly there for procedures. They have higher success rates than competitors, surgeons take more money home and the procedures cost less. It's possible.
Maybe they're referring to the way the system is set up. You're probably not going to shop around for the lowest cost heart surgeon unless you have no insurance. Will they even say how much they charge? Couple that with emergencies. I think the only hope for America is a movement to stop a lot of this stuff before they become issues. Early diagnosis of cancer, national movement to unfat America (whatever that mean), people feeling more responsible for their own health inasmuch as they can.
Availability of prices is definitely an issue. Many, many things aren't emergencies though and arguably many of the expensive ones aren't (cancer treatment, many great procedures once stabilized). My wife used to work on healthcare and has helped friends and family shop around for cancer treatment and heart surgery. However, due to the lack of price transparency this was limited to shopping for quality. We could totally change that though. See the surgery center of Oklahoma website I've linked in several comments
Getting approval to build a new hospital seems to require regulatory stuff and how do you get the staff if there's a cap on how many doctors can be trained a year?
Part of it is that Americans consume a lot more healthcare than other countries. They take more medication. They take more cutting edge medication (e.g. it's rare GLP-1 agonists to be used for weight loss outside the US). They see more therapists and chiropractors. They are more likely to stay in private hospital rooms.
Much of this is heavily subsidized by insurance. Any drastic change in the status quo would inevitably cause pricing and coverage that people are used to be adjusted, which is why they say they want healthcare reform until it actually happens.
US healthcare expenditures are ludicrously high, because the US healthcare “system” is ludicrously inefficient by global standards.
US public healthcare expenditures are similar to what some developed countries with fully public universal healthcare have—and the private expenditures on top are more than the public costs.
People sometimes joke about the US having gaps in healthcare because of defense or other spending, but the fact is the US effectively pays vast amounts of money to create those gaps, rather than having them because of some resource constraints.
There is a lot of skimming at multiple levels. Far too many middle layers and gatekeepers, constantly haggling and looking for more ways to profit. Continuous market consolidation to fewer players looking to exploit economies of scale over decades. Perverse incentives everywhere.
There are still people trying to behave ethically within this framework, but it's hard when the framework itself is so corrupted by profit motives which should never have been there in the first place. Direct providers should be running the show, not financiers. They need to be aware of how to balance the books within reason and be paid properly, but beyond that it should be much more patient focused. We definitely don't need so many profit-taking leeches in all the places we have them now.
Fun fact: Public healthcare spending in the USA is at about 7% of GDP between Medicare, Medicaid, and military healthcare. The US governments spend more on healthcare as a percentage of GDP than many countries spend giving it to everyone.
> The US governments spend more on healthcare as a percentage of GDP than many countries spend giving it to everyone
Is this a product of inflated prices ? Or is this research funding for example ? I'm curious what the complete definition for Healthcare spending actually is.
$885B is Health (aka Medicaid) - healthcare for poor people
$360B Veterans Benefits and Services - at least half of this is healthcare for active and retired military (subset of federal government employees)
The healthcare for non military federal government employees is not included in the above amounts, nor is the state government and lower government level spending on healthcare for employees.
Combine the above numbers with $1.45T in Social Security (cash given to old people), and all other US federal government expenses pale in comparison to wealth transfers to old and sick people.
It's not high considering how much more it costs to get medical care in the USA and the poor efforts by insurance companies and health care in general for pre-emptive care, also US in general is not as healthy as the other Western Nations, where that fault lies I'm not sure (self or general availability of care).
Nothing shocking here. The private equity recipe is pretty simple: 1) Buy a profitable business 2) Increase the margins overnight by removing costs or increasing prices 3) Suck the blood out of the business until it collapses.
3) Sell the carcass and write it off.
4) Rinse and repeat.
Maybe the next Democratic president will use the newly confirmed limitless executive power to reshape our healthcare system. Remove limits on creating new hospitals, eliminate the AMA, add in a public option for insurance, drop the age limit for Medicare to 0, etc. There are plenty of opportunities to use the power for something good.
Obama couldn’t manage to get that passed through congress and had to settle for the AMA as compromise/step-1 except the other steps were dead in the water.
Any chance you mean the ACA? (affordable care act). GP I think is talking about the AMA as a body that artificially constrains the supply of dr's (at least that is my guess as GP also mentions reducing limits on building hospitals).
IMO the GP is touching on removing regulatory burdens (more traditionally republican/conservative ideas) and adding in funding/care via medicare for all etc (democrat position). the combination of reducing/improving/simplifying regulatory burdens while increasing government spending seems to be a combination of ideas that hasn't been winning enough support. afaik, Ezra Klein in his book Abundance is one of the only voices trying to push this balance.
While I agree it would be a wonderful thing to stop connecting private equity and profit generally to lifesaving care. It won't be an establishment Democrat that does this. They wanted this current system, and they still want it, just softened.
Gesturing at a public option during campaigns is just part of the performance.
(Excepting Sanders and perhaps Warren)
I'd be so so happy to be wrong about this.
Because the myth is gone. Presidents have always been restrained by their own willingness not to abuse their power. This willingness was based on two beliefs that Trump has proven mistaken over the last 10 years:
1) Congress will come together to impeach and remove a rogue president, even if he is from their party. This is not true anymore, the impeachment clause is inoperable due to party polarization.
2) The President is liable for any crimes committed in office after he leaves. Merrick Garland proved this wrong after he failed to prosecute Trump for the crime of fomenting insurrection, and then SCOTUS gave Trump and all future presidents an almost impossible shield for future prosecutors to overcome in the form of "presidential immunity".
So unless something changes, the next and all future presidents will have carte blanche to wield the DOJ and FBI to attack his personal political rivals. He can impound and reallocate any Congressionally allocated funds toward implementing his ideological goals, and he can defund any programs he doesn't personally like. He can withhold funding and clearances for companies, lawfirms, and universities unless they implement his agenda. He can send the US army into US states to enforce his agenda. He can withhold disaster relief from areas he deems not politically loyal enough. He can take huge equity stakes of companies he deems nationally critical.
These are all powers POTUS has now, and they will remain powers POTUS until he's prevented from using them.
Again, you are assuming that Congress and SCOTUS will stay consistent in their behavior when there's a new President. The exact same Senate and House that exists today will impeach the next Democratic President in seconds should he/she repeat 1% of what Trump has done since taking office. And every executive action of theirs will be blocked by the Supreme Court in a 6-3 vote.
I think you should expand your line of thought. Think like MAGA in this situation. If you are a Democratic politician with no scruples and a drive to implement your agenda, what could you do? Assume for the sake of argument that you were swept into office on a tide of anti-Trump backlash and you have a majority in Congress.
You could start by passing legislation and excluding it from judicial review under Article III. After all, as you say, the SCOTUS would otherwise vote along their own ideological lines against everything you want to do. Sure, SCOTUS and others will undoubtedly howl that Marbury gives the court the right to judicial review, but you would not be the first president to ask the court "with what army?"
We are at a crossroads. Will the Democratic Party see itself as responsible for conserving the republic and push the government back towards something boring and sane? Can such a party actually get elected today? I have this suspicion that a lot of people think so, especially MAGA -- they [mostly] cannot conceive that the opposition can turn the tables and use identical tactics on them, so they feel like the current situation is a temporary but crucial win only for them, which will move the Overton window to the right. But what if there is really a sea of anger boiling below the surface right now just waiting to be tapped by a Democratic demagogue?
I don't think so, I think I'm accounting for the recent shift in realpolitik. Why would future Democrats impeach their own POTUS for using the DOJ and FBI to arrest their political enemies?
The Democratic party as you knew it is dead; it died in 2024, just as the Republican party as your knew it died in 2020. The Republican party has been reformed into the MAGA party, which bears no resemblance to the neocon Republicans of the 2000s. Just the same, the Democratic party will reform but they will not resemble the party of Clinton/Obama/Biden/Pelosi/Schumer. They are done as a political force.
Moreover, why wouldn't a future POTUS start off by arresting the current conservative SCOTUS judges? Decide on the arrest, make up a pretext, if US attorneys don't comply just fire them until you find one that does, like what they're doing to Comey right now. Make some vacancies and then appoint his own court. Or, just ignore them entirely, there are no consequences for not following their orders.
I would really hope for this to be a thing. I have high suspicion of which ones are due to degradation of quality...but if I'm going to switch to another provide I'd like to know before hand if they are PE or not.
I would have liked more insight into the control group (so called "matched control") hospitals. Typically, PE firms only step in when companies (in this case, hospitals) are struggling. If the PE hospitals were in dire financial straits pre-acquisition, these results don't seem too surprising.
Ideally, the control would be a set of hospitals that PE firms otherwise wanted to acquire but were blocked for reasons unrelated to financials & performance of that hospital, e.g. regulatory. Granted, I expect that might be quite rare.
To be clear, I think private equity firms have had quantifiable negative impacts in many other aspects of healthcare. For example, acquiring helicopter-rescue/air-ambulance companies and sending them out for non-emergency situations.
People assume staff shortages, but I've been to a cheap non-profit hospital and everyone was very green and TERRIBLE at their jobs due to lack of training.
After PE took over regional and rural hospitals, they removed specialties so patients have to be transported to larger hospitals. And guess what else they bought up? Air ambulance services. Flights are up 900% and profits are up too. This undoubtedly increased unnecessary and preventable death and suffering in the name of profiteering. Some things should never be allowed to be under-regulated for-profit cash grabs.
How in the world are private equity groups allowed to own hospitals? One of the largest hospital orgs in the US is a non-profit and so were most in my old state (non-profits on paper at least) so it's surprising to know hospitals can be for profit
I've instinctively been avoiding hospitals run by PE, and now I have a good reason to.
I'll never forget with my first kid they tried to scare us into genetic testing - I mean, they had a pamphlet and video they were required to show us that were meant to scare us into it, but I could tell from the doctors face that she wasn't into it and felt like she was apologizing when she said she had to play this video and leave the room. We switched to a different hospital almost immediately.
Here is a thought experiment, especially for people with pensions (unlikely on the HN comments board). PE's are being funded by pension funds. So, as a pensioner, maybe you get a slightly better return. However, the services you will need as a pensioner (hospital and nursing home care) are significantly degraded by private equity. Would it not be better if pension funds pulled out of PE entirely?
I liked Tulsi Gabbard's "two-tier" proposal for healthcare reform back in 2020. Grant state or federal government full control over emergency care and only the most expensive and obscure cancer treatments all of which act economically as a natural monopoly. Then for every other segment of healthcare where competition can exist, keep them as private markets but greatly enhance antitrust enforcement.
The only thing missing in all the good talk about healthcare is what to do about health insurance, which is the middleman that drives up prices. I propose making all forms of price discrimination illegal in healthcare, i.e. uninsured and HSA patients cannot be charged more than health insurance companies.
I also propose standardizing healthcare into 5 different health plan contracts, then requiring all health insurance companies to make all of their health plans fit into one of those contracts with zero modification to the terms and conditions. This will make litigation faster and easier, and it will avoid fraud disguised as "fine print".
Then, finally I propose requiring all health insurance companies to pay for the services up front and then sue the patient to get the money back, reversing the existing pattern where the burden of proof falls on the patient and the patient has to wait until the insurance provider relents. Think of it like a patient suing an insurance company and getting an injunction to pay out the claim while the legal ruling is pending, but faster.
The entrenched interests would fight tooth and nail against this but I think that the drive towards simplifying billing and pricing is a generally good thing.
That being said, in my view, one of the fundamental problems with healthcare is that outside of truly elective procedures like cosmetic plastic surgery and lasik, it's nearly impossible to have free market economics function.
- There are HUGE information asymmetries between doctors and patients
- Judging performance of doctors is very challenge. Reviews are terribly inaccurate, data can be better but has big problems, and even other doctors aren't good judges of doctors outside their specialty.
- Right now at least, price discovery is nonexistent so you can't price shop and compete on price vs quality
- Insurance means that consumers of healthcare are not actually footing the bill so they have no incentive to price shop. And most healthcare procedures are completely unaffordable so there's no way we can do without insurance
- and finally it's really hard to make an economic decision that is literally life and death. Am I going to forgo a $100k surgery if it means I'll die? There's no choice there
All of these things lead me to the conclusion that healthcare is fundamentally incompatible with classic free market economics, and some form of single payer is the only solution to avoid us bankrupting our country spending on healthcare
> I propose making all forms of price discrimination illegal in healthcare, i.e. uninsured and HSA patients cannot be charged more than health insurance companies.
As long as it's left generic so it goes both ways. Currently it's usually the uninsured patients who are charged less (since they're paying the whole thing out of pocket instead of having insurance cover most or all of it), not the insured patients.
I'm not comparing the bill uninsured patients pay to the bill insured patients pay. I'm comparing the bill hospitals charge uninsured patients to the bill hospitals charge insurance companies for insured patients.
Hospitals and clinics offer a preferential rate to insurance companies as a sort of volume discount because insurance companies with thousands of patients have a lot more negotiating power than any individual patient who is uninsured or using an HSA.
It got even worse once health insurance companies started negotiating contracts with favored nations clauses requiring hospitals to bill then ~10-30% less than patients paying out of pocket. It's an oligopoly, but on the demand side: an oligopsony.
>Beneficiaries in EDs of private equity hospitals experienced 7.0 additional deaths per 10 000 visits after acquisition relative to control (13.4% increase from a raw baseline of 52.4 deaths per 10 000; P = 0.009).
In other words, an increase of 0.00055 deaths per visit.
>Limitation:
>Potential unmeasured confounding; lack of generalizability to other acquisitions or patient populations.
Block all news sites? I Just did that, it does help! I like HN because it’s pure text and the community is good. At least here people disagree and try to use some evidence or logic and engage with each other.
I was thinking I could buy an hour or so of time in my day cutting this all out, surely then I’d be shredding music practice way more… so hard to get down to it after work and kids.
Looking at death rates in isolation paints a misleading picture, like accounting only for costs and ignoring revenue. Net profit is the measure of overall value to the economy, and whatever maximizes profit is by definition the greatest good for the greatest (i.e., best, if not most numerous) people.
is the change in death rate because the health services got worse or because the type of patients going to that hospital have shifted?
if they slash staffing and make it hard to schedule in a reasonable amount of time, patients with low-risk issues will just skip going altogether. Or, if they have the means, go to a nicer hospital.
The market really is the greatest mechanism for laundering morally reprehensible processes, isn't it? I find that many people struggle to find the vocabulary or concepts to denounce this kind of outcome because it occurs through market forces.
I’d rather these hard decisions be made by public officials. It’s more ethical to make treatment of the sick and elderly a public affair and not a for profit industry.
Yeah if instead of "PE" you had to say "I take out a massive loan to buy a business collateralized against itself, saddle the business with the debt, take money out of the company to pay myself, and then ruthlessly cut quality in the business to make short term profits look higher to resell the business (and the bank is happy to finance this because they get paid first if the business goes bankrupt)" it feels like it would be a lot harder to come across as legitimate
That term is more a reference to globalism, consumerism, multinationals, wealth inequality, etc. It's been overused by the public to mean "anything I don't like that has some tentative link to capitalism"
Surely a component of late stage capitalism is the accumulation of wealth leading to anti-competitive practices, in this case resulting in degradation of quality of service. Health care in the US isn’t a competitive business therefore it’s rife for anti-consumer, profit-maximizing change.
But you can have all those things without late-stage capitalism - and private equity predates late-stage capitalism. So saying "it's because of late-stage capitalism" is like saying "it's because of democracy". The private equity is happening within a democracy and late-stage capitalist system, but these are correlations, not causations.
There are a significant number of people in this country that will view this as the market enforcing rational healthcare (at least until it affects a loved one). I’m not sure we have the will to improve our care.
This lack of empathy extends to many other areas: Drug addiction, homelessness, rights for marginalized groups, etc. So long as there is a profit motive, these things will suffer due to the selfishness of those who don't (yet) receive a benefit.
Emergency room care is definitely not a rational market. Hospitals have a federal obligation to provide stabilizing care regardless of ability to pay. That's not really a market.
I wonder how this study controlled for hospital selection though. In locations with multiple hospitals available, ambulances route patients on multiple factors... Perhaps there are factors leading to these hospitals receiving patients less likely to survive.
Additionally, PE often purchases distressed companies, so the likely alternative to a PE purchase of a hospital is a closed hospital. In some cases, closing the hospital would be better, but probably not all of them.
There's lots of ways that market forces that should normally work don't. For instance:
* the amount billed to individuals is often wildly different than the bill an insurance agency would negotiate with a provider. (I'm not an expert, there may be more layers of indirection there; this is simply my mildly-educated impression.)
* Depending on the sort of care you seek, a provider may have a de-facto monopoly in the area.
* There's no obligation (or indeed incentive) to be up-front about costs—we've all had the experience where we were charged for a service that wasn't even presented as a clear option, let alone one that would cost money, let alone anything approaching a reasonable charge for the service rendered.
* When you need care the most is often when you're least able or inclined to play providers against each other/shop around.
* Deductibles are so high we're essentially pitting high regular premiums against worst-case scenarios, which is deviously difficult to reason about, even for actuarial experts.
...etc etc. It's not easy to proactively think through costs in the world of American healthcare even as a cost-conscious, pessimistic actor. And on top of all this, the sheer bureaucracy necessary to manage negotiating payments and insurance coding adds a significant amount of overhead (inefficiency) to the provider's end bill and to your premiums—how on earth can you audit a provider's or insurer's efficiency? It's all opaque, and most of us don't want to think about it at all.
We both have the will to improve care and a lack of understanding of the true nature of the finance industry. People don't understand what PE is so they assume it is some kind of business people legitimately trying to run a business
You're going to have to articulate yourself with particulars if you want me to understand what you're talking about. For instance, I didn't mention private equity at all, so I'm confused why you might think I was attempting to refer to them.
Perhaps a hot take (to some at least): the invisible hand works. Supply demand, it works [1]. Unfortunately, that also means that your life can be priced out of the market. If one finds that important, then it doesn't work.
Profit motives don't care about humans, it cares about profit. If it has to care about humans because of it, then so be it.
We've never been individualists. We need infrastructure, thus some form of collective action. Without roads, no freedom to comfortably drive a car, without the internet no freedom to comfortably search for information, without healthcare no freedom to comfortably stay healthy when a medical emergency occurs.
Could you imagine if all roads were a for profit road? Could you imagine if TCP/IP was for profit? Well, I think some of you could, as some of you know failed attempts of protocols for money at that deep of a level. I'm curious about the stories.
In any case, that's what's happening here with medical institutions that should have an infrastructure role.
[1] Well, to be fair, there are many caveats, but let's not go into oligopolies, cartel-like formations, etc.
>>"We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness"
The institutions supporting three things, Health Care (Life), Prisons and Justice (Liberty), and Education (Pursuit of Happiness), should never be run for a profit if a society wants to be equitable and prosperous.
Capitalism and profit motive are great for some things in a society, but are also counterproductive at many others. Use the right tool or system for the right job.
Unchecked capitalism may create a couple of wonder drugs costing millions, for a few people, and enrich the 0.1%. On the average it will kill more people, make more people bankrupt and kill the economy.
This certainly reflects my experience with private equity in general. It seems private equity by definition does not care if you die in any form direct or indirect. IMO its one of the greatest evils going on that literally nothing is being done about.
Last year I went to an interview where they flat out admitted to me that the private equity that bought them fired the entire previous team because they "believed" it could be done with far less people (4 vs 25). I asked them who has been maintaining things since that happened and they told me they have been hiring contractors to get through the period but "they haven't really been doing the job". I guess at least they were honest with me so I could nope out of there ASAP.
Did anybody really expect any other possible outcome? Humans have an astonishing ability to put their self-interest before others. Even if it money vs a life.
That said... How much is a day, a month, or a year of a human life worth? Since it's clearly not infinite, there must be some line where saving a life is too expensive. What is that line?
Of course I have no answer here, but I think this ethical dilemma is what it boils down to. Still terrible. :(
History will be hard pressed to find a success story after private equity takes anything over. Here I was thinking I had coined a term for them, only to find out it already exists... "HYENA CAPITALISM".
Hyenas typically eat carcasses. Similarly it seems PE usually buys already distressed businesses. Is the problem the PE or are they making the best from what's left of a dead business? I genuinely don't know.
Anecdotally, here in Portland metro everyone is upset about a PE firm that's ruining several beloved local restaurant chains. They bought them up during the pandemic and now many of them are closing. The local Reddit is hating on the PE firm. I suspect these restaurants would have closed during the pandemic if it hadn't been for the acquisition. They then failed anyways because certain parts of our metro area didn't recover well. I don't have access to their books. So I'm just speculating but this seems highly likely to me.
i'd be curious about other metrics in addition to death rate...
- health adjusted quality of life metrics and the way they are impacted by various diagnoses
- healthspan metrics
- patient satisfaction
- employee satisfaction
Ultimately, capitalism is not necessarily at odds with providing efficient high qualty healthcare. But we have to decide what matters. If death rate were the only relevant metric, medicine would be practiced much differently.
I agree, I don't think capitalism is inherently at odds with quality healthcare, and technically private equity isn't either but it certainly raises the chances. PE firms tend to be fairly parasitic with their investments - maybe that's fine for a restaurant chain but that sucks when you're dealing with lives (people or animals). I used to be in health insurance and you knew when there were nursing homes and clinics/faciltiies that were owned by PE. PE-owned nursing homes tend to have far more infractions against them, more elder abuse claims, and lower quality of life for the residents. You could say well PE buys up facilities that have room for improvement, which sometimes that's true, but in many times they seem to buy because (imo) they feel they can get by with lower regulatory enforcement so can cut costs and squeeze them. Sometimes they do buy or build higher-end senior living facilities but those are cash cows in their own way that you don't want to cut corners with.
This take is also a little funny because people do often conflate "capitalism" and e.g. "markets", which certainly don't rely on capitalism. But "private equity" is about as tightly-bound to the concept of capitalism as you can imagine.
> Ultimately, capitalism is not necessarily at odds with providing efficient high quality healthcare.
Um, yes it is?
First off, there is tension between "efficient" and "high quality". High quality in an environment with peaky demand requires over-resourcing during periods of lower demand, which is inefficient. The best way to resource for peaky demand curves is to run at 60-80% usage (i.e. 20-40% idle).
Health care has peaky demand curves. PE is going to optimize on efficiency therefore degrading peak demand performance, which is when quality matters the most.
Second, capitalism optimizes resources to maximize value capture. That's great when value capture is tied closely to value delivery, like you want a hamburger and you get a hamburger.
Not when value capture is diffusely tied to value delivery. You want a stable market economy with rule of law to protect your property and your contracts. While without this, nothing you own has any worth (making it the most valuable thing possible), the value of this is rarely delivered to you in discrete chunks.
How can capitalism create things like my macbook m3 that are very high quality, but you don't think it can create a very high quality healthcare business?
Why doesn't everyone have a macbook like mine? Because society hasn't decided to subsidize them. But that doesn't mean the macbook isn't high quality.
Capitalism's incentives alone are not sufficient to provide healthcare in a way that most people think is reasonable and fair for all members of society. But that doesn't mean that it can't be useful in allocating capital in ways that are very beneficial to society.
The purpose of regulation can be to create incentives where capitalist participants profit goals align with society's notion of what is best for everyone.
The problem as usual is that some people think that researchers who create new medicines should not be motivated by profits, or that doctors are taking too much money, etc. Any dimension that we regulate will result in pressures on other parts of the system. In my view, government is often not good at creating socially optimal regulations because interest groups get involved and create regulatory capture.
Should surgeons really earn $900K and the top student in a top med school class has a 50% chance of even getting the chance to train in that subspecialty? Do the outcomes really justify such an excessive focus on quality? Should we all expect our insurance to cover 2025 pharma options when 2010 options might cost half as much?
The "optimizations" we have at this point are far from optimal, and any serious analysis needs to look at many different measures of quality or it doesn't make sense. Much medical care has virtually no impact on longevity, does that mean it is useless? I'm not advocating for private equity at all, just saying that it is the regulatory environment that creates those "market opportunities" for PE firms, not something about capitalism. As we've seen with Trump and the support his base has for his whimsical tariffs, people put way too much faith in government's ability to optimize things.
What are you faffing on about?
With no barriers, pure capitalism would consolidate healthcare into a full vertical and horizontal monopoly. This is basically what PE firms are doing, but indirectly.
Capital doesn't organize around any secondary metric but profit without being forced.
Employee satisfaction? Are you completely out of touch? Speak to any working professional in a PE owned hospital system. It's horrid, the worst, dystopian, soul diminishing.
Satisfaction only matters if there are other places you can go.
Patient satisfaction? It's already 'accept what we give you, pay what we demand, or you die' in rural areas or if you are poor/uninsured. People already avoid going to the doctor when they should because of this.
What bizarre alternate world are you living in?
HOSPITALS: “High-markup” hospitals are overwhelmingly for-profit, located in large metropolitan areas and have the worst patient outcomes https://www.uclahealth.org/news/release/high-markup-hospital...
>These “high-markup hospitals” (HMH), which comprised about 10% of the total the researchers examined, charged up to 17 times the true cost of care. By contrast, markups at other hospitals were an average of three times the cost of care.
>They also have significantly worse patient outcomes compared with lower-cost hospitals, new UCLA research finds.
NURSING HOMES: Owner Incentives and Performance in Healthcare: Private Equity in Nursing Homes ( https://www.nber.org/papers/w28474
>After instrumenting for the patient-nursing home match, we recover a local average treatment effect on mortality of 11%. Declines in measures of patient well-being, nurse staffing, and compliance with care standards help to explain the mortality effect.
And I am sure the nurses are overworked and not receiving competitive pay to boot.
Speaking from experience, the only people who can afford to live as nursing home staff (typically LPNs) are the poor. In my metro area, only the presence of a large low-income high-crime area allows for a low enough cost of living for its residents to survive on nursing home pay. I think these folks can make more working at McDonalds. The quality of care is garbage... Less than 10% of nursing homes in my area provide the care I'd want for my relatives.
Oddly enough, even homes that advertise RNs and a high number of staff still don't provide the care I'd want for me relatives. The only homes I've been to where the staff are genuinely great are nursing homes out in the boonies, in rural areas at least an hour outside of my city.
I can echo this statement. My mother is in a nursing home facility for the last 8 years.
She is located in the facility she worked in as a poor laborer before becoming a resident. The facility is over an hour from the nearest metro area.
The care she receives there is pretty good. The staff are mostly locals in the rural town and are comfortable being poor and living that life.
We considered moving her into the city to be close to family who have to drive almost 3 hours to see her but the care is so bad in the city it isn’t worth it.
We have had family members in city nursing homes and they’re abysmal. Which to some level I get. The people there like you stated are underpaid and overworked. They live in bad neighborhoods because of systemic poverty. They bring all the stress of being poor in a metro city with them to work. Quality of care plummets but there’s nothing that can be done because no one is going to pay more than bare minimum to reach mandatory staff minimums.
> locals in the rural town and are comfortable being poor and living that life
> all the stress of being poor in a metro city
Is it generally accepted that people in similar economic circumstances have improved life satisfaction in rural areas? It is counterintuitive to me given any city typically has better low cost amenities like museums, libraries, and parks than rural areas that I have observed.
Think about how often you got to a museum, library, or park compared to how often you eat and pay the monthly bills. The more expensive the area, the higher the routine bills and wages don't always track that, especially at the low end.
Both have significant advantages, shared walls reducing energy costs and the ability to live without a car can make a huge difference at the bottom.
It’s really suburbs that end up the most expensive. You combine higher housing and labor costs vs rural areas without any of the cost savings of cities.
Some people prefer space, privacy, and nature over cultural amenities. It's possible to survive on fairly little income if you own some land and are able to hunt, fish, and grow a bit of your own food. Being poor is still tough anywhere but people get by.
> It is counterintuitive to me given any city typically has better low cost amenities like museums, libraries, and parks
Indeed, one can also add availability of theaters, operas, music festivals, multi-cuisine restaurants and sport complexes too.
And the situation will get worse due to aging population demographics. This type of work is among the hardest to automate.
> The quality of care is garbage... Less than 10% of nursing homes in my area provide the care I'd want for my relatives.
As a paramedic who delivered probably thousands of patients to (and picked up patients from) nursing homes, I'd unfortunately absolutely agree. Not always to the point of filing complaints, but not great.
> Oddly enough, even homes that advertise RNs and a high number of staff still don't provide the care I'd want for me relatives.
As that same paramedic, absolutely, you know why?
Many of those homes have ONE RN as the supervisor for a bunch of LPNs and CNAs. And they have policies/insurance/whatever that say "anything larger than a bandaid, call 911 and have them deal with it", which leads to ridiculous situations where you have two nurses standing around while my partner and I bandage a straightforward laceration.
Those are usually the ones advertising out front "Round the clock nursing care" (and absolutely charging for it).
There was an article here in HN how nurses and nursing home staff in a lot of US are basically using an "uber for Nursing" app where you get a request and you can accept it or not......but the company that built it has a "desperation" score on every nurse and the more desperate they are estimated to be, the less money they are offered for the job - the logic being that they are not in a position to refuse.
Honestly, the article literally made me want to vomit. I'm not religious but our society has sacrificed everything human in the worship of mammon.
Report: https://rooseveltinstitute.org/publications/uber-for-nursing...
HN discussion about a similar company exposing private information: https://news.ycombinator.com/item?id=43349115
The apps are ESHYFT, ShiftKey, ShiftMed, and CareRev. CareRev is a YC company (https://www.ycombinator.com/companies/carerev), so maybe the founders are around to explain the technical details of their desperation algorithm or why they allow employers to cancel shifts with 2 hours of notice.
Or maybe the developers are on here and can explain why they agreed to implement such a thing?
Better profits and more efficient rent extraction is the why. Stick to the how and you might get an answer?
Is this anything more than a scary way to describe a pricing algorithm?
Honest question - are you trying to downplay the absolute horror of our technofeudalistic society, where nurses(!!!) are paid in a gig economy betting on their hours, where (if you read the report) the hospitals are free to cancel their shifts with no or little penalty even during the shift, while nurses are heavily penalized on every side, and things like having a lot of debt means you will be offered less money for your shifts because the app determines you are desperate?
Yes sure, technically that's no different than Uber hiking up your price at 3am because really, what other choices do you have.
But I do hope you spend a minute to wonder what is it doing to our society as a whole, and how the relentless pursuit of profit means we treat people whose job is literally to look after others like disposable trash that can be priced the same way a taxi ride is.
Sure, it's "just a scary way to describe it" - and I hope it's really scary.
What you described is nothing new. Staffing firms for nurses have existed for a long time. These apps are automating the process and making it easier for both sides. I'm open to the idea that it's worse for workers but I haven't seen it. People seem to flock to these apps. To me that means they prefer the arbitrary and capricious nature of an algorithm over the arbitrary and capricious nature of human managers.
>>Staffing firms for nurses have existed for a long time.
Do those staffing firms for nurses also pull information on your credit card debt and offer nurses less money if they have a lot of debt?
That doesn't really address my point.
I'm sorry, what is your point then. Because I thought it was that the apps and hiring houses for nurses are effectively the same - which is why I'm asking if they also pay less if you have more debt.
That in practice the arbitrary nature of the algorithm is superior to the arbitrary nature of human hiring.
For the company the algorithm works for? Yeah, no doubt about it. For the nurses? No, I don't believe that - unless like I asked earlier, the employment agencies also reduce their pay if they think they are desperate. In which case I'm happy to concede this point.
But you know, free markets, invisible hand, everything else is Communism or something. Carry on.
This highlights the problem with privatizing things like healthcare and education, something libertarians don't understand. It works for the Koch's because they can pay for anything. It doesn't work if you're not rich.
I wouldn't say privatizing is the problem. It isn't. Private is often, or generally, good, as it gives you the freedom to pursue good ends without unnecessary involvement of state bureaucracy. It's bad and weird to have the state involved in everything. It's for-profit that is problematic in the mentioned cases.
Healthcare, insurance, banking, education, and so on should be not-for-profits or nonprofits (depending on the case).
Health of the population is in the public interest, therefore it should be run by the public. Same with education.
We can have nonprofit education, say, and people will still be left out.
Less education is bad for you, it's bad for me, and it's bad for the whole country. Therefore it must be public or we must suffer.
I think nonprofits can be bent to something weird, too. But might be worth a try. The current situation is just crazy.
All nonprofit means is that you are not organized with profit as a primary goal. It doesn't mean you don't make money, and it doesn't mean that executives don't have outlandish compensation.
Main problem with non profits in my understanding is, that they are often created for tax evasion purposes, but the legit non profits still get the regulatory heat.
For-profit-of-outside-investors
What is the incentive for a private entity to engage in non-profit business.. charity?
Nobody want's the state involved because they think they'll do a better job, they want the state involved because it's the last option available with incentives remotely aligned with the benefit of the polity.
Anecdotally, my friend's mom was is a nurse at a hospital that got bought up a while ago. During COVID, her pay and the hours were awful. She left shortly after. It blows my mind how little some hospitals can pay a nurse, while others are paying much more, all for the same core work. I believe she has since found a new hospital to work at and is making significantly more.
As the son of a nurse, the lack of hazard pay for putting up with doctors’ egos is also unconscionable. Doctors make mistakes all the time but you wouldn’t know it by looking at them.
And to extend your statement, and not to imply this was what you were saying: overwork in Nursing doesn't just happen either, the scheduling and staffing is very intentional and very much a management decision
Is anyone else here also see the insane schedules nurses often work as unsustainable? 12 hour shifts seem incredibly common. I get there's risks in patient handoffs, but there are risks in understaffing and overworking people as well.
I personally know of several people who ended up having to leave acute nursing because they just couldn't continue with the schedules while trying to have any kind of sane family life. It seems to me hospitals need to change up schedules to have better options for work.
But I'm a lay person tech bro looking at an industry I only have a small window in. What are the other arguments for and against these kind of long schedules?
nurse to patient ratios and the type/level of care needed in the patient mix factor higher in overwork imho
These are the hospitals that are essentially all travel nurses.
Worked to death, but well paid. Don't actually have to care anything more than the bare minimum because at the end of the day, there's an end of the day (contract).
I can anecdotally confirm this, based on my father's experience in a private-equity owned facility in California. It was astonishing how under-staffed they were for the amount of care the patients needed. (I'm sure they were at least nominally in compliance with whatever the regulations said, but that doesn't mean they were adequately staffed.)
Thing is, I loved those nurses. I watched them walk in with the look I remember from my restaurant days when you knew you'd be in the weeds all shift - call it a hundred-yard stare, if you like. They were all completely burnt out, and openly and cheerfully cynical and contemptuous towards the owners and administrators, but for the sake of the patients they just got on with it, as best they could. I don't think I ever saw the head nurse sit down.
There weren't enough supplies, because the laundry service was late, so I went back to my dad's house and brought him an extra blanket. The next day I got another for his neighbor.
There weren't really any rules, because nobody had time for that. The blanket thing? Shouldn't have been allowed, especially giving one to someone else. I asked about visiting hours, and just got a raised eyebrow, and "just put 8pm on the signout sheet". I said "well, then, I'll come back with a six-pack and stay until midnight!" She laughed at me, because I was (half) joking, but I'm pretty sure that would have been fine.
More substantively, when my dad needed the heavy-duty painkillers - prescribed by his doctor, mind - the administration (reached by phone) wouldn't allow them to be dispensed - supposedly because of the liability of having that kind of controlled substance on site; we sorted it out, but it took a couple of of days - when that happened, I said I'd bring in the bottle he had at home and give them to him myself. The nurse said pretty much "we can't do that - but if I didn't see it, it didn't happen," so I did. Then she made sure to give him his other medications herself, so she could check on how much I'd given him, and that it wouldn't cause a problem with the other pain-killers he was on.
I'm sure all of those things were wildly "wrong", from someone's point of view - ethically, or legally, or fiscally, or something. But I viewed the whole situation as so morally appalling - people live there for months, waiting to die - that I can't view those nurses' ethical commitment to whatever it takes to make their patients' lives more tolerable as anything but admirable.
Thing is, we're eating our societal seed-corn. The more awful those jobs are made, the more quickly people burn out of them, and the worse the care provided will become. Those folks were dying on their feet, and there was no help coming, and I don't know how much longer that facility - let alone the whole medical system - can stay afloat on those admirable people's dwindling store of compassion.
But hey, some folks got a little richer by owning that place. All the rest of it's a small price to pay for living in such a land of glorious opportunity, right?
For-profit hospitals, like for-profit prisons, should be banned. They create perverse incentives.
Universal healthcare is such a painfully obvious improvement. Only literally every other OECD country has figured it out.
Does that extend to the staff or do you just have some weird hangup about collective groups? Because you know NGOs often pay their CEOs huge salaries, well beyond what they need to survive. It's all profit.
Seems like a non-sequitur. How are you addressing the perverse incentive? Yes CEOs get paid too much, yes workers get paid, there’s no “weird hang up” in the parent comment. It’s just logical that if our country believes as a founding principle in life, then don’t let money and profit get in the way of life.
Just enforce a limit on the CEO salary (and bonus) not exceeding a multiplier of your lowest wage employee.
Even if non-profit groups are paying high salaries (usually to retain talent), it's very different than profits going to shareholders. The purpose of a _for-profit_ company is to deliver returns to its shareholders. Therefore, decisions are inherently biased towards increasing that value as much as possible. Whereas the purpose of a non-profit is not to pay high salaries to its CEOs, and therefore decisions aren't biased towards that, nor does the CEO's salary grow relative to the hospital's growth. (The hospital increasing its profit margin by 15% doesn't mean the CEO's salary goes up by 15% -- whereas it would mean that shareholder value increases by 15%.)
This is an impossible argument to make in America because the mindshare and persuasion behind the idea that free markets are best have clouded all humane judgement.
We have to move the argument to “this is an illegal business”. The Right is an amalgamation of extreme Libertarianism and race-centric Nationalism currently, and making a persuasive argument to them requires breaking everything they think they know about what is “good” in the world.
I say this with respect to actually politically reshaping the discourse dynamic (it has to start at debate).
The Right is the obstacle to solving this, not the Left. This is not a universal issue, it’s only a universal issue for people to politely agree and get along, but all actionable items are against the ideology of the Right. To put it simply, to get to where we need to get, we have to chisel and whither away their narratives and mindshare in debate, they skate freely on this topic. Their stance and narrative actually have no place in a problem-solving environment (we can’t solve it if the underlying ideology holds free markets paramount, over humanity).
I agree but I find it odd.
I don’t hear anyone (well some, but very few and usually not taken seriously) suggest police and fire departments should be for profit, so clearly it’s understood that some services should not be profit driven.
But apparently it’s a huge leap to extend that to healthcare.
Certain aspects of their jobs absolutely could and perhaps should be privatized.
Getting the patrol aspect of policing privatized would cut down a lot of the worst of the stuff cops get caught doing.
You don't see rent-a-cops going off and killing people.
The inspection and compliance related clerical work that a lot of municipal fire departments do could probably be privatized but I don't see an argument for it like I do with cops since they're less abusive. Nobody ever wrote a song called fuck the fire department.
> You don't see rent-a-cops going off and killing people.
Haha, I just saw a video the other day of a couple of “bounty hunters” (bailbondsmen) pulling up with tactical gear and rifles and kidnapping some kid because he had the same name/ethnicity.
Naturally (and thankfully) these idiots are being charged, but one of the kidnappers sat in an interview whining about how his job was too hard because he lacked qualified immunity.
> Getting the patrol aspect of policing privatized would cut down a lot of the worst of the stuff cops get caught doing.
Are you referring to something like the current private security patrol or an actual police? If it's the former it already is there, if it's the latter I'm not sure how that'd cut down on the amount of bad things police do today.
We already have private prisons. It's not much of a leap to also privatize other parts of the judicial system, including certain police forces.
This is an excellent point. We all seem to grasp that private fire and cops would be a an awful idea.
And as I'm sure you know, the answer to why it's a huge leap for healthcare is the obscene profits that healthcare companies make off of the healthy, the sick, and the dying.
Now let's recognize that we live in a system that fully supports this trading of health and lives for money.
> This is an impossible argument to make in America because the mind share and persuasion behind the idea that free markets are best have clouded all humane judgement.
Is this according to something like Gallup polling? Or according to what the talking heads on cable news say? Americans can be very progressive according to polling data, despite all the best efforts of the propaganda machine.
The implicit assumption in libertarian perspectives is that all parties are rational and have similar levels of information. In healthcare, this is simply not true. The average person isn't capable to judge what is and isn't necessary for them (outside of the small amount of very routine and elective care).
Likewise, if a hospital hands you a bill for 30k and you need help, are you really going to be able to negotiate and find a better price?
Healthcare is fundamentally an in-elastic good.
Most American hospitals are nonprofits and all of them operate in the free market.
It's actually not particularly a free market.
Check out Certificates of Need. You need one to open a new hospital in an area.
The other existing hospitals in the area get to comment on how it would affect their business and if it would cause them to reduce their investment.
This is all framed as "ensuring communities are appropriately served with healthcare capacity," but CoNs were an idea that was conceived by and lobbied for by ... hospital owners.
I'm the last person here who would defend provider chains, who I believe are in fact at the root of the problems in the American health care system, and certainly the Certificate of Need system --- which applies variably to about half the states in the US --- is stupid, and does restrict the market (most markets are somewhere on a spectrum between free and unfree).
But the alternate problem exists too: hospitals with too many vacant beds, and hospitals shutting down because lack of utilization makes it impossible to pencil out keeping them up and running. That's happening where I am right now.
How is that not just a consequence of market based healtcare? Winners and losers is a natural consequence of market competition, and the instability it brings is natural as well.
If by majority you mean 48%
What’s your point?
That a market setting and the non-profit status of market actors are orthogonal issues.
We were better off when the churches ran the hospitals.
The Catholic Church is still the largest non-governmental provider of healthcare in the world.
We'd be better of if heathcare was never provided for profit.
Careful what you wish for. The two major hospitals in my area are run by (1) the Catholic Church, and (2) the local major research university. While I'm sure they could get worse, if PE took over - I've got friends and family who received disastrously poor care at both of 'em. And neither hospital ever cared about that.
17x. Jesus.
Is the list of such places public? Sounds like very important information for people who need medical care. (Which is... everyone?)
I was charged $6000 for literally walking into the ER of a hospital in 2022 when I had covid and was having trouble breathing. This did not include the 20 mins of tests they ran for me before telling me I was fine and booting me out within the hour, those were billed seperately. Literally just the cost of using the ER was $6000 (this was the adjusted price after insurance), in addition to anything else. As you can tell from this comment, I'm still mad about it.
Which state is this? I've gotten lucky with my insurance, expecting big bills. But I think some state laws are stricter than others when it comes to Surprise Billing. Was your hospital in network?
This was in California (greater Bay Area), and the hospital was in network, but some of the ER physicians ended up not being (not the source of this part of the bill). I had a high deductible plan (10k IIRC?) so that I could stock away cash in an HSA every month. I've since switched to a much lower deductible plan in case I needed to go to the ER again, but then I also to another county and have gotten much more reasonable bills at the hospital near me.
similar. i guess i got a bargain cause I got 2.5 hours in ER with a couple tests for only $4k! Adjusted down to .. $2300 after 'insurance' (which I was paying $500/month for, with a $7k deductible).
One of the most important provisions of the ACA was the caps on the "medical loss ratio", the percent of insurance premiums paid out for medical care. The act required insurance plans to maintain a MLR no lower than (IIRC) 70-80%. Before then, plans (eg, targeting college kids) had MLRs as low as 10%.
(For comparison, Medicare/Medicaid has something like a 95% MLR, because it has low administrative overhead and isn't returning a profit to shareholders.)
17x upcharges, if they were extracted at the insurance level instead of the hospital level, would be the equivalent of a MLR of around 6%.
This of course has the unfortunate side affect of rewarding insurance companies for overpaying for medical care by allowing them to raise premiums and thus generate a higher profit.
This. I want to know which places to avoid at all costs.
I wonder if we will be allowed to share this information in the future in someone knew a love one died in for profit hospital that might provoke violence against feel market believers.
Isn't trading higher profit for +11% more deaths also violence?
> Isn't trading higher profit for +11% more deaths also violence?
I have a friend who firmly believes that speed limits higher than 50MPH are violence because they lead to increased deaths. He argues that if we cared about people's lives we would impose a strict 50MPH limit on the roads and even force all cars to top out at 50MPH from the factory.
There are millions of tradeoffs in the world where we could reduce deaths, but there's never and endpoint where it's truly done. It's really easy to imagine revenge on PE firms by crushing their profits for a noble cause, but the conversation becomes a lot murkier when the impact starts hitting closer to your own paycheck or lifestyle.
>I have a friend who firmly believes that speed limits higher than 50MPH are violence because they lead to increased deaths. He argues that if we cared about people's lives we would impose a strict 50MPH limit on the roads and even force all cars to top out at 50MPH from the factory.
If you really want to stir shit ask him what we enforce those speed limits with.
(hint:violence, but with extra steps)
You open your hood to see a 50 mph max speed engine in your vehicle... You notice that roving speed enforcement is no longer necessary except in school zones, freeing up public resources.
You contemplate this new world... Is this... violence? It must be... manufacturing regulations are violence against businesses (people)! You relax a little. You imagine someone 'woke' being angry at your incisiveness, you are calm.
I have an engine with a 50mph speed limiter on it.
I open the hood and add a resistor across the input sensor so that it thinks I'm going 20% slower than I really am.
I start driving at 60mph.
How does society enforce the speed limit regulation against me? (Hint: the threat of, and eventually the use of, violence.)
This is what I'm getting at in the sibling comment. Most people make decisions that in the aggregate cost lives. The causal connection and moral weight of taking a life through speeding (or, more likely, by helping create the permission structure for everybody else to speed by speeding yourself) is pretty clear. And I'm saying this as someone who drives at the prevailing rate, rather than the posted limit.
None of this is to say that PE firms squeezing vital hospitals aren't morally culpable. Just that there's a meaningful distinction between immoral decisionmaking and violence.
That's the "magic" that underpins all the perverse things modern western societies engage in.
Life is considered valuable in integer quantities but fractional life is considered value-less.
People are free to do, endorse, concoct and peddle all sorts of things that waste people's time (life) or waste people's money on the basis that it "saves lives" because it prevents lives from being lost in whole numbers but the sum total of the little fractions ad up to more.
I just think we can express the idea that things are very bad without doing violence to the word violence.
Intentionally and artificially reducing the quality or quantity of life-saving resources to the point of excess death is, in fact, violence. I think you wouldn't have trouble recognizing the starvation campaign is Gaza as intentional violence.
Thus, I have no trouble asserting that PE firms commit intentional violence against patients.
Indirection allows you diffuse the responsibility into the anodyne 'immoral decisionmaking' while social murder remains as it ever was.
Hurtling down the road in excess of the speed limit is also dangerous. Both actions have some probability of killing someone over a long enough time horizon. What's the threshold? Or are most people in cars also essentially murderers as well?
You misunderstand.
It isn't 'all the drivers' fractionally at fault (others can quibble about that), it's the people who create the moral hazard. The car industry and politicians that decided that the ungoverned car, the road, and the parking lot will be the only way to traverse Dallas or LA lo those many years ago, the ones that affirm that system with 'one more road' using tax dollars year after year, knowing that more people will die as a result. https://en.wikipedia.org/wiki/Motor_vehicle_fatality_rate_in... <- the line goes up.
They have a duty of care as representatives that they are failing to meet. Compare that to cities in Europe or the North East. When you make policies that serve the few and sacrifice the bodies of the many, that act is violence.
Likewise, with PE. When they intentionally understaff a hospital, no single doctor is responsible for killing the patient that died bleeding in the waiting room. It is the choice that we allowed that PE firm to make. Are you comfortable with a fresh MBA using excel to ensure that your local hospital should have four less doctors than strictly necessary to treat you in a timely manner? Society doesn't need to be organized this way, we can and should demand better.
Imagine the reverse, a municipality decides to privatize their water and sewage treatment, but puts no restrictions on the results as long at those wealthy enough are not inconvenienced. This is precisely how you get Flint. Or redlined cities that put the 'undesirables' in industrial waste parks. These acts are violence.
This seems like a worldview calculated so that individuals almost never have any culpability --- even when speeding down the road, the responsibility for that harm is more properly attributed to corporations and politicians. From that vantage point, it's clear to me why one would see the decisions of a hospital-owning PE firm as "violent", while not seeing the decisions of a reckless driver that way.
The term "social murder" has a long pedigree, and is really the term of art for this kind of concealed/indirect "violence". Mark Twain's quote about the two Reigns of Terror also applies, and is perhaps a little older.
Right, and if you go from the actual definition of social murder, basically everybody in the G8 is a murderer, unless you artificially confine the analysis to your own county.
I'm sure the concept has a lot of utility philosophically, but when you try to distill it down to "PE firm owners are murderers" you wind up in pretty crazy places unless you supply a lot of motivated reasoning and special pleading.
There's infinite levels of badness and eventually it does reach a point, be it in risk, probability, magnitude, or impact, in which it is super bad, and we may consider it violence, or murder, or crimes against humanity, or what have you.
Everything is not everything else. Scale not only matters, it's almost the only thing that matters.
If you can define that threshold, you don't need terms like "social murder" anymore.
Nobody can really because it's complicated. Or, at least, nobody can agree, which is why we have the terms. However, I think the terms have some validity, because the broader concept does.
I mean, is Hitler a murderer? Is your run of the mill burglary gone wrong worse than the Holocaust? Obviously not. So there has to be some kind of understanding of organized death.
I'm not sure "at least it wasn't the Holocaust" is, in practice, quite the defense legal argument it's being made out to be here.
I see your point, but I’m not sure that I agree.
Consider that when speeding, you might cause an accident. Such an accident would most likely impact a small number of people other than yourself.
When a PE firm engages in extractive hospital management, it provably increases mortality rate, and it does so at scale.
The first choice carries possible risks of lower magnitude, the second choice carries guaranteed risk of higher magnitude.
“Risky behavior” vs “ruthless greed”, the latter feels much closer to violence.
I recently saw an article which was talking about a study thatc concluded that if the Autobahn here in Germany had a speedlimit of 120 Kph we would save a grand total of roughtly 58 lives per year.
German article: https://www.spiegel.de/auto/tempolimit-120-koennte-58-mensch...
"we could reduce deaths, but there's never and endpoint where it's truly done"
What a wonderful argument for never trying to improve the world you also reside in.
"your own paycheck or lifestyle."
If excess mortality is required for your lifestyle, change how you live. Do you deny insurance claims for fun? Are you the human avatar of GE and Raytheon? Do you need to manufacture child-vaporizing bombs to maintain your 'lifestyle'?
Genuinely, what is wrong with you? PE firms are not people to take vengeance on. They are not necessary, if they vanished from the Earth tomorrow, the 'worst' outcome is the wealthy owners and workers would need to find new, less violent, employment.
In residential area it is at the very least negligence on the part of authorities who set the limit
The claim was that 50mph should be the highest limit anywhere, including freeways.
Combined with a hard 50mph limit imposed on vehicles. You buy a new car, it can't go faster than 50mph, period.
The movement has roots in Ralph Nader going back to the 50s https://nader.org/1970/12/11/the-american-automobile-designe...
That's a little bit out there if taken out of context. On my street the limit is 15 KM/h, on most city roads it's 30 (again, KM/h, not MPH), but on the actual highways where only cars are present and where you don't necessarily need to be, the limit is over a 100.
Now I can probably understand how one can take such radical position, when living in a place that doesn't restrict cars as much as they are restricted here. It's like being so much disillusioned with US that USSR propaganda starts to be appealing and belieaveble. I guess?
Just wait until they start stealing wiper blades.
To the extent it is, people are universally guilty of it, unless you can find a clear bright line for which selfish(/rational) decisions are violent and which aren't. Is it some number of hops from the person who dies that makes the difference?
> To the extent it is, people are universally guilty of it, unless you can find a clear bright line for which selfish(/rational)
We all ingest some level of arsenic, and are "universally" exposed to radioactivity, but just because something is falls on a continuous spectrum, doesn't mean all levels are equal, there is a point where it becomes too much. That point will not be the same for everyone, but it exists.
> Is it some number of hops from the person who dies that makes the difference?
Not according to the Nuremberg trials.
Right, so if that's something you believe, regarding Nuremberg, then you're basically acknowledging my point.
No, because you're insinuating that since we're all responsible for some micromorts[1], somehow our culpability is the same as those who are some responsible for hundreds or thousands of morts[0], which is equating across 10 orders of magnitude in risk to human lives.
1. https://en.m.wikipedia.org/wiki/Micromort
2. Is that what you call 10^6 micromorts?
That's not actually what I'm saying at all. I'm saying that we make specific choices that have material mortality costs to the world, not that simply by taking up space in our living room we're responsible for some number of nanomorts or whatever. Speeding on the road isn't the most important of those choices, but it's usefully easy to reason about, so start there. If you want to get closer to the culpability that a PE firm has, think about all the ways in which we deliberately benefit from global inequality.
All of this can be (is!) bad. But it's not violence in any meaningful sense of the term.
We are all guilty of living in our own society? No, some people are hundreds of times more responsible.
I wonder why your opinion is so unpopular around here.
Surely the hapless landscaper is substantially less responsible for any violence, death, etc, etc, he benefits from than say a lobbyist who gets paid to get the laws to favor his employer.
We don't need to figure out an exact formula in order to be able to conclude some parties leverage violence far more than others.
There's a clear chain of responsibility.
That's just begging the question. What's the clear chain?
Do you think that these policies just appear out of thin air, and enforce themselves?
I think the replies splitting hairs on what is violence and what isn't is missing the point.
This is a hospital. A building designed for differentiating life and death and(hopefully) attempting to steer towards the former.
This isn't a speed limit or some other market where there's no ethical consumption. One doesn't choose going to a hospital. It's a place you go when you are at metaphorical gunpoint.
I wouldn't call it violence, but I think it's A Problem when companies have two viable policies, and they choose the one that is known by them to statistically cause more deaths.
On top of that, people will give them social cover for making this decision. Because, y'know, its just capitalism/business or whatever. It's not like they murdered someone, they just told their worker bees to do something they knew would kill more people than they had to.
No, only direct fist-on-face contact is violence. Indirect violence doesn't exist.
My impression is a lot of US health care problems are caused in part by a sort of unholy combination of restricted competition and access, together with profit driven market participants. So you end up with this marketplace constricted by overregulation — some well-meaning but often basically occurring because of protectionist moats and regulatory capture — increasingly controlled by profiteers trying to extract as much money as possible, with patients at the bottom, providers in the middle, and executives at the top. I think the problems with monopolies in the US are broad in scope but it hits healthcare especially hard because of how grotesquely distorted it is.
I'm not surprised by this finding, although I find in economics and healthcare forums the results tend to be misused (at least in my opinion), because it gets used to argue against any deregulation or cost cutting, instead of cost cutting of the type that tends to happen for the benefit of investors and shareholders, rather than cost cutting of the type that increases healthcare options and access.
> So you end up with this marketplace constricted by overregulation — some well-meaning but often basically occurring because of protectionist moats and regulatory capture
Don't hand-wave your claim of overregulation, be specific and name the regulations you think should go away.
In the USA/Canada number of doctors minted is caped by the cartel of doctors. That costs non-trivial money and lives lost.
Source: https://thedailyeconomy.org/article/how-congress-created-the... and many others
The older generation MDs screwed up here, but now insurances are heavily pushing NPs and PAs to take their place.
The nursing orgs are naturally lobbying hard (MD and RN orgs have an icy relationship).
The quality and capabilities of these noctors—calling themselves residents and even doctors and performing surgeries and general anesthesia—is a growing problem.
Better with noctors than nothing at all. I know that's a false dichotomy in the long run, but for the present it isn't, given the regulatory environment. PA/NP is basically backup plan for a lot of people that don't get into med school or don't anticipate they could.
I’d say it’s worse.
Incompetent treatment is worse than not being treated at all.
It’s not to say that noctors can’t be competent within a narrow domain; it’s that they’re being taught to increase their scope of treatment beyond their training.
If it becomes common, then it’d be safer and more cost-effective to pay out of pocket and get treatment in another Westernized nation.
I basically treat NP/PAs and doctors as a pulse with a DEA license attached. Once you realize you basically need to figure it out for yourself, for much of anything but surgery and meds, you'll realize you are better off with them vs having police put you in a tiny cage for ordering drugs without a prescription (in my state I can self order imagery and labs, so don't need docs for that). I consider their opinion totally disposable but they offer some stuff the government will imprison me for if I don't get the magic signature for.
Just treat them as totally incompetent and nudge them where they need to go. No need to assume or rely on competence that may not exist.
How do you “nudge”, in the middle of a surgery?
>for much of anything but surgery and meds,
So you’re excluding diagnosis w/ treatment: That is, where the greatest risks are and where the MDs are necessary.
It seems like a useless metric.
US residency funding has not increased since 1997, and residency spots is the real chokepoint
According to the article, the caps were enacted because of a fear that the people might want too much healthcare. Do I even need to look into which party pushed this?
It was very barely increased in 2021. Nowhere near enough though
While important, this is immaterial to the NBC article. The PE firms CUT the number of employees in ER rooms in this paper, so having more doctors wouldn't actually help out the problem that the NBC article is describing.
"The increased deaths in emergency departments at private equity-owned hospitals are most likely the result of reduced staffing levels after the acquisitions, which the study also measured, said Dr. Zirui Song, a co-author and associate professor of health care policy and medicine at Harvard Medical School."
The issue with American healthcare is the profit-seeking capitalists.
theoretically, wouldn't increasing the supply of doctors have a downward pressure on wages and thus make it cheaper to employ more of them?
Sure, it would make it cheaper. Would that result in these companies employing more doctors to perform the same amount of care at higher quality, or would it result in them retaining the standard of care they're currently providing while taking home a larger profit margin?
There are a lot of hospitals where there is an endless supply people showing up to the ER with non-emergent stuff because it is the only place required to take them, and their number is only limited by wait time due to triage; they'll just leave if it takes too long as their life isn't threatened and they have something else to do.
You could hire a whole army of doctors and they'd still be there, word gets around. If the doctors are cheap enough to cover whatever you can get from debt collection agencies to sell off the debt they'll never pay, then you could hire a lot.
If this is happening now, why would they cut the number of doctors?
They can't sell the debt for uninsured non-emergent case for enough money to cover the doctor.
Cutting doctors means only the most prioritized triage cases makes it to doctors, which skews towards people that are employed or on medicare and the money can be recouped, and thus improves profitability.
It's an end-run against the requirement they take in the hordes of people with no insurance who show up to the ER for low-income cases and no way to pay it.
If doctors were so cheap as to be covered by the sales to debt collectors, the whole thing gets flipped, as it would be profitable to just hire armies of them to cover the hordes who come in with non-emergent cases.
Do we really think an increase in the supply of doctors will cause prices to collapse so hard that selling off unpaid medical debt will be profitable?
That depends, can we use IRS agents with guns to collect money to backstop unpaid medical debt?
It absolutely would. Source: live in a country which "democratized" access to medical schools and flooded the market with doctors. Consequences? Let's just say that the term "secondary effects" doesn't quite cover it.
This thread is talking about ERs so let's focus on that. Pay for a 12 hour shift has fallen by over 50% and that's without accounting for inflation. As a result, only heavily indebted and inexperienced doctors are manning the ERs now. These are critical life saving jobs that ought to attract the most experienced doctors but they turned into reassigned-to-Antartica tier jobs that only new or failed doctors put up with. Now factor in the substandard education provided by the hundreds of newly created medical schools which don't even have a hospital for students to practice in. The result is of course stupid and incompetent doctors manning ERs. I remember one guy who sent home a patient with textbook myocardial infarction symptoms without even ordering a routine EKG, obviously leading to the patient's death. Imagine being that dude's lawyer.
Depressing the wages of healthcare workers has fatal consequences. There's no reason at all to spend the best decade of one's life busting ass in medical school and residency if one is not gonna get rich off of it. You want your doctor to be the smartest, most studious, most hard working, most debt-free person you'll ever meet. You don't want to put your life and well-being in the hands of a stupid indebted doctor who graduated from a diploma mill.
Well, it could be both. Having more doctors before cuts means having more after cuts.
And the more expensive a doctor is, the more you save by cutting one/the larger the total wage bill for doctors is for a fixed number of doctors, making that bill a higher proportion of total expenses and a higher priority for cuts/the fewer doctors you get for a fixed amount of money.
> so having more doctors wouldn't actually help out the problem that the NBC article is describing.
It could because a larger supply of doctors means salaries would be lower, and thus the incentive to cut staff is lower.
> The issue with American healthcare is the profit-seeking capitalists.
Profit seeking capitalists would be fine if healthcare was a competitive market, like grocery sale.
But it isn't, and I honestly don't see how to make it one. Full price transparency would help, but I don't believe classical free market selfregulation can work out for the healthcare sector, by design.
You need good ability of healthcare customers to judge quality of treatment/medication, to know prices beforehand and to have sufficient choice for market dynamics to work, and every single one of those points is somewhere between really difficult and impossible.
An embedded requirement for a rational market is that the customer has to be able to make a rational evaluation of the costs of the good vs the quality, which just doesn't exist in medical fields. Patients don't know enough to make that choice and evaluate the efficacy of many potential choices of providers. Not being able to do that fundamentally kneecaps the implicit assumptions in the already faulty model that underpins the 'competitive market' analysis. We should just accept that and stop trying to treat it as one and provide it as a public good.
Most markets fail here. I can't even make good decisions about which electronics or appliances to buy, which restaurants to visit, which mechanic to use, and it's not for lack of research or unwillingness to pay. Advertising allows brands to build undeserved market reputation, and brands regularly sabotage their own legitimately established brand reputation for financialization.
I think it's particularly bad in medical decisions though because it's so much more advanced and cases are so varied it's difficult to compare doctor performance on different procedures. At least with products you generally get similar items each time so people can test multiple products in some scenario and a buyer can know what they buy should perform similarly.
For the overwhelming majority of things people to go to the hospital for, where you go doesn't really matter, because the treatment and diagnosis is extremely routine. This includes very serious things like cancer. My mother, through a variety of fortuitous events, was able to have her breast cancer treated at one of the top ranked cancer specializing hospitals in the US. She had acquaintances that had theirs treated at the local university/training hospital. They ended up receiving literally the exact same treatments.
Same for my own stuff. The first time one of my children got sick it was terrifying, so I naturally took him to the most premium pediatric healthcare institution. And what did they do? Basic tests to rule out anything particularly nasty, and fever management. The exact same thing the cheapest hospital does, except I got the privilege of paying 10x more for it and feeling like a complete sucker. From that point on - 'oh he's sick? shall we go to the university hospital, or the religious nonprofit?'
This isn’t true in aggregate though. Cancer treatment outcomes varies quite a bit even for the same type of cancer.
Unfortunately it does matter. NCI designated cancer centers simply do have better outcomes than local hospitals.
This is not entirely clear. Elsewhere in this thread I found a couple of studies on this exact topic. The first [1] is just for breast cancer and after normalizing across a wide array of variables, found no improved survival rates except for black women, which I think is suggestive of further biases.
The second [2] is for all sorts of cancers, but is a large observational study without much effort to control for biases. It found an overall increase in five year survival rates of 3.6% (64.3% in NCI centers, vs 60.7% in non-NCI). That's certainly something, but it's fairly certain that biases would bring that down a healthy chunk.
However there were significantly better outcomes in more rare/lethal cancers. For instance in hepatobiliary cancers, the NCI survival rate was 33.8% vs 18.7% for non-NCI centers. And that is largely the point I'm making. For the overwhelming majority of things, care is mostly commoditized and you will be fine wherever you go. The value of high end institutions is mostly only realized in the case of rare/serious issues, for which transfer is always an option anyhow.
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Though I'd also add here that these examples, cancer, are on the fringe extremes of what my point was. That there is a strong argument to be made that even cancer falls within it, just further emphasizes the point. If your local hospital can competently treat cancer, they can certainly treat the overwhelming majority of reasons people go to the hospital, which are relatively far more commoditized.
[1] - https://pmc.ncbi.nlm.nih.gov/articles/PMC8462568/
[2] - https://pmc.ncbi.nlm.nih.gov/articles/PMC4892698/
"can competently treat cancer, they can certainly treat the overwhelming majority of reasons"
No this claim, just because, is not weight-bearing. Extraordinary claims require extraordinary evidence. And I don't understand the motivation to make such a tenuous link when at a bare minimum one can look up direct data like joint commision and MPSMS safety data and related publications. There is tremendous variability in serious hospital safety events inter-institution for bread and butter admissions. One can further just examine CMS and NHS data for mortality and readmission for "mundane" MI, HF, sepsis, pneumonia, respiratory failure. OB/GYN outcomes are their own thing.
The flaw in reasoning here is that quality of care and outcomes is strongly related to the simplicity of diagnosis. A further flaw is the belief that care is "commoditized". Treatment protocols vary widely across institutions and health systems, often times based on cost factors. Certain basic things can not be done at night, or even the day for fully accredited hospitals. There's a big difference somewhere with 24 hour anesthesia airway and in-house surgery and not just an intensivist "on call" 600 miles away and staff that can't even do RSI. Transfer is not always an option, there's a reason critically ill people die more frequently in the sticks. If one is admitted to a regional hospital, they are unlikely to be accepted for transfer to a safer hospital unless they truly need an intervention that absolutely cannot be provided where they are, not simply because there is better backup provider support and a higher standard of safety. They will still remain at that higher risk for sepsis, or outdated care because the community physician group doesn't keep up with guidelines, or that hospital only offers the inferior treatment (or a limited formulary) for cost-cutting reasons.
Breast cancer and most cancers are not even typical inpatient encounters. Breast cancer is generally not managed on an inpatient basis, in fact one may never even have to visit an inpatient hospital campus for breast cancer. Upgrades for cancer are usually different than acute inpatient care. Breast cancer does not usually involve abdominal, intrathoracic or orthopedic surgery. Breast cancer does not usually involve advanced interventions like endarterectomy, ECMO. Cancer is a special case. Regardless of complexity, extrapolating cancer treatment to even the most "mundane" acute inpatient or surgical care really is beyond ridiculous.
This is a complex subject and this is a silly hot take.
Again, feel free to provide data instead of lighting strawmen alight. In general you are already speaking of things that are primarily relevant for people critically ill in senescence, which is both a fringe scenario and also (I think obviously) not the general case sort of scenario I'm speaking of. But even there! Out of curiosity, I decided to look up data on e.g. sepsis readmission rates vs hospital quality. [1]
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"One third of sepsis survivors were readmitted and wide variation exists between hospitals. Several demographic and structural factors are associated with this variation. Measures of higher quality in-hospital care were correlated with higher readmission rates. Several potential explanations are possible including poor risk standardization, more research is needed."
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As they're implying, this is likely due to biasing and not a causal observation. One possible explanation is that higher quality hospitals may be able to keep people knocking on deaths door a bit longer than lower quality hospitals, but it's not like night and day - they're still knocking on that door, just a bit longer. And so it makes sense that they'd actually have worse outcomes on discharge, including higher overall readmission rates. But once again the picture between the quality of hospitals is not this tremendous dichotomy that many try to frame it as.
Billionaires, in general, seek out the highest quality care money can buy, and have no limitations on the meta-factors that also improve longevity including activity, relationships, healthy food, exercise, etc. Yet their life expectancy (~85) is comparable to the life expectancy of Hispanics in America. The "Hispanic Paradox" [2] again emphasizes that longevity isn't about premium healthcare and money.
[1] - https://journals.lww.com/ccmjournal/abstract/2017/07000/seps...
[2] - https://en.wikipedia.org/wiki/Hispanic_paradox
https://pubmed.ncbi.nlm.nih.gov/28060228/
MI, HF, sepsis, pneumonia, respiratory failure are among the most common reasons for inpatient admission, not fringe.
Equating acute decompensation of chronic illnesses requiring inpatient admission to "knocking on death's door" is a bit simplistic.
No data has been provided showing how the relevance of outcomes based on institution of first presentation (not definitive management) for breast cancer, that is usually managed outpatient on an elective basis, has anything to do with outcomes for the "overwhelming majority of things people to go to the hospital for".
Even pre-pandemic the life expectancy of Hispanics was not as high as billionaires. Speaking of "deaths door" perhaps at least QALY, or something else is a more appropriate metric.
Cheers on the study!
Let me first describe what I meant by fringe though. Take a random adult going to the hospital, not elderly, with no other major health conditions. When he walks in the door, what are the distributions of issues that he might end up having? Sepsis is going to have a probability of near 0. By contrast the typical patient that might present with sepsis - elderly, other major health conditions, well into senescence - he is generally indeed 'knocking on deaths door.' He might not answer this time (though there's a decent chance he will!), but he will imminently.
Your study compared hospitals based on a number of factors. The most significant was high volume, but in that case the difference between the highest volume hospitals and lowest was a 13.3% rate of readmission vs a 11.2% rate of readmission for hip replacement, and 12.4% vs 11% for knee replacement. Again I think this is another example of when you look at the actual data, outcomes fall quite close.
Beware their method of taking a sampling and breaking it into buckets and comparing those buckets. If even hospitals/patients were identical (which I'm certainly not claiming) and so the results were literally just random noise on a distribution, you'd see a major difference between the top and bottom buckets due to the nature of random distributions - 68-95-99.7 and all that. Their results show a signal beyond that, but it's generally a very misleading way of presenting data because of this issue.
Pre-pandemic hispanics had a life expectancy of about 82, which I described as comparable to the 85 of billionaires. I'd certainly expect billionaires to be higher for the endless reasons outlined in the already linked Hispanic paradox. The fact that it's only 3 years, less than 4% longer, is the point.
EDIT: tl;dr
Two registry cohort papers on breast cancer outcomes, one only in Los Angeles county "provide extensive evidence for my claim"
The claim: For the overwhelming majority of things people to go to the hospital for, where you go doesn't really matter.
Ok, whatever.
This is not anecdotal. At least for the cancer we're discussing, breast cancer, there is no meaningful difference between hospitals. Here [1] is a study on this exact question for breast cancer.
They covered an extensive number of variables across hospitals and patients (including NCI/ACS status). They found no correlation with improved survival rates for any variable except for black women receiving their initial treatment at an ACS hospital. While that is technically an affirmation of your claims, I think it is clearly suggestive of some form of bias rather than being a clear causal association.
[1] - https://pmc.ncbi.nlm.nih.gov/articles/PMC8462568/
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I said for the overwhelming majority of things people go to the hospital for. And the overwhelming majority would be things far more commoditized than cancer - stomach aches, injuries, fevers, infections, cardiovascular issues, etc. I chose breast cancer because it is the most common type of cancer and at the extreme fringes of my what comment might cover. It just so happens that my comment does cover it as well.
Incidentally, it's also the same story for colorectal cancer, the 2nd most common type of cancer. Here's another study on the topic. [1] They have a survival rate of 88.6 vs 85.9 for breast cancer, but it's a large observational study that's not normalized, so the confounders/biases there probably explain the reduction in survival rate at non-NIC hospitals. Colorectal cancer is even smaller - 0.2%.
NIC hospitals only showed a significant effect on cancers with low survival rates, and especially on rarer cancers. For instance with pancreatic cancer 93.8% of people who went to a non-NIC hospital were dead in 5 years, by contrast 'only' 87.5% of NIC hospital patients were. Feel free to look up the data yourself. I'm not searching for cherry picked studies, there are none - as there seem to be oddly few studies on this question, and they all say the same thing. What benefit there is is quite small, and heavily driven by extremely rare things.
[1] - https://pmc.ncbi.nlm.nih.gov/articles/PMC4892698/
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Feel free to find a single study that you think supports your position. I've provided extensive evidence for my claims which you want to claim is insufficient or somehow cherry picked. You've provided nothing, and are now relying exclusively on ad hominem.
Two registry cohort papers on breast cancer outcomes, one only in Los Angeles county "provide extensive evidence for my claims"
The claim: For the overwhelming majority of things people to go to the hospital for, where you go doesn't really matter.
You win, as always.
https://news.ycombinator.com/item?id=45199654
You chose to take us down the path of cancer, not entirely unreasonable as I mentioned it. But it is clearly in the fringe extremes of my argument since it is one disease where, ostensibly, specialized care could really pay off. But it turns out that even in the case of cancer, the benefit of specialized care (for the most cancers at least) is small to zero.
If your local hospital can treat e.g. colorectal or breast cancer to the same degree as a specialized institution, then they can certainly competently treat the overwhelming majority of other issues that people show up to the hospital with, which are generally going to be substantially more mundane with rather more 'commoditized' treatment available.
That's a cart-before-the-horse analysis.
Labelling markets "rational" is pure rhetoric. There's nothing even remotely rational about a market system, because the moral basis of calling markets "rational" is... greed.
Just greed. Nothing else.
All of the failed outcomes, deaths, pollution, lost opportunities, distortions of democracy, and other damages are a direct consequence of this moral system which claims that greed is rational - when in fact unfettered greed is clearly and objectively sociopathic, with predictable sociopathic outcomes.
We're all greedy. We all want to get the most for our money, time and effort.
Greed and desire push us to spend our energy, otherwise we'd simply conserve it.
It's normal, it's natural and it works. It's human (and animal) nature.
Altruism works fine in individuals and small organizations. But large systems based on altruism uniformly failed to provide the most basic necessities (like food) for their citizens. Can't work against human nature.
> We're all greedy. We all want to get the most for our money, time and effort.
We are?
For example, I never file taxes. I'm certain I could get quite a bit back. I am far from rich, I earn medium pay in Germany - medium overall, not medium in IT. (Because I deliberately took a more rewarding and relaxing job, but that's besides the point.)
I will not fill my mind with "money" stuff. Even if that costs me some of that money.
I am sure, given that the terms used are as fuzzy as can be, you can twist and shake the words until you can claim that I am "greedy", the problem with this rationality discussions is how extremely flexible the words used are, making it quite impossible to win or lose an argument. All one has to do is insist on one's own definitions... but taking a relaxed view, I don't see good way to make not-at-all-rare positions such as mine as a form of "greed", without severely twisting the commonly understood meaning(s).
I think a lot of that world view is self-fulfilling.
When I was a kid I LOVED working like the adults. That includes taking one to four week stints in factories, as a teenager in school. That was common in East Germany and encouraged, early acquaintance with work life. I did the same helping out my craftsman grandfather and my shop-owing grandmother.
Work was FUN!
But now, the reason I don't just go - which I would LOVE to do! - and work a few hours low-level jobs here and there, is because it's all been heavily commercialized. You just don't do that! Work has to be pain, and you get paid. Only an idiot would work for free!
During university, during a semester break, I took a job in a chocolate factory. I did not actually need the money! My parents paid (divorced, but both paid). I actually had a lot over at the end of university (cheap dorm housing and no fees for the university itself sure helped). I took the job because I wanted to work in a factory again. It is FUN!.
Until that middle manager a..ole appüeared. I had just optimized my in-between assignment of taking care of some machine chocolate thing, some mixing, I forgot the details. I had set everything up perfectly and now had to just wait a few minutes for the machine to finish.
In comes that.... manager guy. Immediately, seeing me sitting there he yelled at me why I'm not working. FU manager guy. That was the day I realized work now is WORK, not fun. You are not supposed to have fun. You now need middle manager person to keep your lazy ass in check! By yourself, without continuous pressure, you would not move a hand! Right?
At least for the "lower" jobs, which are the majority.
> It's normal, it's natural and it works. It's human (and animal) nature.
You are definitely not speaking for a lot of people, and what you see is NOT the one natural outcome. Expectations and behavior towards people determine theirs (behavior).
The culture I describe existed all around me in East Germany. Yes we were waaayyy backwards with everything, but work culture was really good. I learned a technical profession in a large chemical factory before studying. Everybody worked, useful stuff too, all day. The ancient machinery in the crumbling buildings needed a lot of attention to keep them running. There was hardly any slacking off anywhere I looked. Sure, it was relaxed, but it was work, work, work. I've seen waayyy more slacking off in the offices of large American IT companies.
What you describe as "natural" is natural only in the context the current society has created.
> We are?
Yes we are. When discussing a salary offer, do you negotiate it down? When buying products and services, do you just pay the minimum amount asked or do you offer more from the goodness of your heart? When getting your paycheck do you immediately donate most of it to the less fortunate in Africa, keeping only enough to cover the bare necessities for yourself? If not, welcome to the club: you too are greedy.
> When I was a kid I LOVED working like the adults.
My kids loved helping with yard when they were little. Their reward was spending time with me and learning. It was enough then. Now, as teens, not so much. I have to pay to motivate them.
> Work was FUN!
Work is still fun, for me at least. But a paycheck makes it even better. I don't know anybody cleaning sewage for pure fun though.
> East Germany
I too grew up in communist Eastern Europe. I clearly remember the never ending lines for food and any basic items like soap or toilet paper. With the profit motivation made illegal, nobody did any work and we were all starving.
I agree with you but this website is sociopath central so I'm not surprised this got down votes. A lot of Ayn Rand fans here. But you know that already, judging by your karma score.
> ... would be fine if healthcare was a competitive market. But it isn't, and I honestly don't see how to make it one.
The "mixed economy" model - introduce government run hospitals to create competition.
Indian healthcare industry is experimenting with such a model. There are free to cheap government hospitals (along with medical colleges that provide cheap labour in the form of student interns) and smaller public health clinics, that work somewhat like the UK NHS model. But as they tend to be over crowded, or have high wait times to see experts, people with money (and / or insurance) tend to prefer good private hospitals. Private hospitals do charge a lot, but where there are good government hospitals, they have to be mindful that they do not charge too much. Affordable insurance (along with socialised government insurance) and medicines also make access to quality healthcare possible.
Huh, I really like this approach. My economics knowledge isn't great, but I do know that healthcare is quite inelastic because people are willing to pay high prices to be healthy. A mixed model would siphon off the most desperate to a good option, and inject local competition.
I advocated against universal healthcare for a long time, since I was worried that it would cause stagnation in health innovation, but now I see a need for universal healthcare for the 80-90% most common procedures (and leave private clinics to innovate). The only downside I can think of is less dependence on insurance, which has the potential to drive up premiums. But, if that means taking care of the poor for the most common ailments, then it's a worthwhile tradeoff.
The further you get from a perfect market, the less free market dynamics work. And even if they did, there's nothing in the theory that would minimize for patient deaths. The theory says that as patients die, people who are living would go to hospitals with better outcomes. But to achieve this outcome
1. patients need to be able to actually choose where to go. If they are incapacitated they have no choice in where they are taken.
2. we have to endure an unknown number of deaths for an undetermined period of time while we wait for the market to reach equilibrium.
So it's pretty clear free market dynamics are not the way to go when it comes to the healthcare marketplace.
In what sense do you mean that healthcare isn't a competitive market? Are you talking about locales with only one nearby hospital? I'm in a big city and I have 3 of them, and the choice of 5 different major provider chains. I don't like the system (I think provider abuses are the major cause of health spending problems in this country), but one thing I can't say is that I don't have options.
What I mean is that the dynamics of healthcare are not conducive for a competitive market.
Compare grocery shopping:
You have frequent/repeated interactions; if you always get ripped of by one shop, you can go to another. Before you go grocery shopping, you will have a decent mental model for: prices levels at each shop, quality of produce and accessibility/distance. You also have the full choice in where to go, basically every time.
Hospital interactions (especially ER) is the polar opposite:
You will have few interactions with it over your lifetime (hopefully), costs are basically impossible to know beforehand (and difficult to compare, too), quality of treatment is extremely difficult to judge as patient (because every case is somewhat unique, and outcomes can easily come down to luck/individual doctor). Especially in the ER case, you often don't even have a real choice of hospital and even in cases where you could (and had all the info) there might be throughput limitations on "desirable" hospitals that prevent you from switching (=> having to wait for 5 months).
Another factor I think is that hospitals gain less from being "good": As a "good" grocer, you get to steal market share from your competition at low cost and risk to yourself; for the hospital, scaling up is more difficult and risky, thus "good" competitors are also less threatening comparatively (thus less of a motivation to improve things).
So I understand where you're coming from, and there are certainly major market distortions in health in the US (employer-provided health insurance being the most obvious). But where I live, "which ER will you go to" is a major, market-driven conversation. I have 3 obvious options, and 2 of them are competitive, and if I go look for conversations and "reviews" I'll find plenty of opinions quickly. To me, it's at least as competitive as the market for plumbers.
> but I don't believe classical free market selfregulation can work out for the healthcare sector, by design.
That would come as news to the French.
The TL;DR of the French system is that you pay for your outpatient care at the point of service. Later, your insurance company will reimburse you for 80% of the "reasonable and customary" charges for the service. It's up to you to pick the provider that matches your budget.
Emergency care is understood as not amenable to the free market, and that doesn't have the same payment flow. Having said that, I could tell you some stories about folks who wound up worse off because the care was still rationed, just by the state instead of an insurance company.
I'll preempt the common next argument, and that is that emergency care is ~ 10% of US medical spending, so it's probably not Pareto efficient to start with that case when designing how this all works.
> I could tell you some stories about folks who wound up worse off because the care was still rationed, just by the state instead of an insurance company.
I wish this would stop being used like it's a credible argument. The truth is that we can find these cases in any healthcare system. The only valid evidence when weighing system versus system is aggregate numbers.
For the record: With "classical free market selfregulation" I mean something that is quite far from any civilized system. Standards of care, education of caregivers and even pricing levels to some degree are all regulated in your example (which I think is a good idea).
I would literally expect overpriced snake-oil from actual free market healthcare, and there is significant empirical evidence that this would happen from my point of view.
Restricted supply of physicians means that there aren't enough of them to open a competing hospital.
Your complaint against for-profit hospitals would apply just as quickly to a nonprofit hospital in a socialist regime. The fundamental problem is monopoly. Because most people don't behave nicely unless they are forced to by market pressures. Whether those markets are economic or social in nature.
Even if you ignore present-day socialist economies, you can look to NIMBYism in the developed world as a flagrant example of what happens when "normal people" gain collective control over a resource without any competitors. They immediately weaponize it to the harm of greater society. If not for financial purposes, then ideological ones.
I stand by this: Physicians in the US are some of the only people who are paid what they deserve, in terms of authentic human value delivered. And only in the US are they paid what they deserve. They deserve their semi-monopolistic trade union.
Admin bloat is a far larger problem, and so are the pharmaceutical companies which get to charge the government whatever they want to develop new drugs that often are only marginally effective.
I appreciate the defense of doctors wages for great work; I would agree that many doctors absolutely deserve it and more.
But this "semi-monopolistic trade union" not only inflates their wages (which maybe that's a good thing), but it also harms the lives of the population they purport to serve. Many (most imo) people in the US simply cannot afford the monopoly's prices, and the monopoly has little incentive to innovate. This cartel of doctors actively prevents lower-cost, more efficient alternatives from coming to market.
Noah Smith has had some good posts on health care costs in the US over the past year
https://www.noahpinion.blog/p/insurance-companies-arent-the-...
https://www.noahpinion.blog/p/service-costs-arent-exploding-...
Linking blog articles that bury the lead behind paywall make it impossible to discuss anything.
However, at the core, US insurance system is the problem because it gets compounded by government trying to regulate such a system, so people do not die needlessly, but not destroy these profit seeking enterprises. So, what you end up with is a massive mess that leaves everybody cranky.
Pharmaceuticals cost 15% of what we pay in delivery of health services from doctors.
I'd have no problem if they were just a trade union. In fact they are a systemic machine of mass violence, capturing the regulatory apparatus of government to use men with guns to enforce their licensing regime which of course you must walk through the pearly gates of their institutions to be blessed under.
That’s not a regulatory issue
It obviously is. A federal government policy decision caps the number of doctors we have, and another federal government policy decision restricts a huge number of basic medical services to those doctors.
The AMA is creating the bottleneck, not the government directly.
When the government accepts AMA lobbying and sets a regulatory cap on the number of new residencies, it is regulating, and is fully culpable for doing so. Your logic basically defines the government away, treating it instead as the product of the influences acting on it.
> sets a regulatory cap on the number of new residencies
there is no regulatory cap on the number of new residencies
there is a cap on _federal funding_ for new residency slots; yes that impacts hospitals' willingness to add new positions, but it's _not_ the same as a regulatory cap
What kind of issue it is then ? If a regulation permits the doctors associations to set the allowed number of doctors residency, naively it is a regulatory issue.
It's a funding issue. There aren't enough residency slots available given the number of medical school grads. Residency is a requirement to get a medical license--which is issued by the states, not the federal gov. The reason there aren't enough residency slots is because they are heavily subsidized by the federal gov and they put a cap on the funding. No one else wants to foot the bill, so the slots remain limited, thus the licenses remains limited.
Since the government (federal or state/local) authorizes those organizations to certify physicians and restricts medical care to only those who have been certified, it is.
- The AMA froze the number of med schools for decades even as residency availability increased.
- The majority of states still maintain "certificate of need" laws for new hospitals, ambulance providers, etc.
- The AMA holds a state-enforced monopoly over physicians.
- Many states still limit NPs/PAs, requiring physician supervision for things for which those people were trained.
- Lack of interstate reciprocity in licensing means mobility is constrained and supply can't follow demand.
- Costly medical equipment usually requires first-party repairs; mfgs claim a third-party modification (repair) constitutes remanufacturing under FDA regs.
- Stark law makes e.g. physician/hospital value-based care arrangements very hard. It's quite strict and everyone has to tiptoe around it a bit.
There's also the huge problem of malpractice insurance costs due to insane tort settlements. Awards need to be capped yesterday because it's too easy to talk a jury into bankrupting people over things that legitimately just sometimes happen.
I'm guessing others could give you an even better list. Some of those are a bigger deal than others but it's a huge issue. Insurance net margins just aren't high enough to blame it and drug costs aren't enough of our total healthcare spend to be at fault.
It comes down to humans being too expensive. There remain many areas of care where we can't cut man-hours down without sacrificing safety and quality. As such, we should reduce the insane byzantine co-ordination and compliance overhead.
Don’t forget that the AMA has a monopoly on billing codes. Medicare defines the billing value of every procedure as Relative Value Units (RVUs). Then Medicare defers to AMA’s guidance on what these values should be. Insurers default to RVUs x multiplier. So the AMA has the ability to set prices.
Oh, and patient value isn’t considered for these units. They are explicitly defined as input driven, so a procedure that is less costly to perform but has higher value to the patient will be billed at a lower value. Hospitals are incentivized to choose procedures that they can bill at a higher rate, and so because of these perverse incentives, they necessarily will ignore cheaper more effective treatments and choose the more expensive ones.
I’m a lefty, but the older I get the less I believe in the old New Deal style leftism I’ve been sold my whole life. As systems get more complex, they simply become a way to obfuscate oligarchic control.
Certificate of Need: basically, prove to regulators that there is enough "need" before opening up new facilities.
https://en.wikipedia.org/wiki/Certificate_of_need
As someone already pointed out, PE owned hospitals are in states with, and in states without, CON requirements. Certainly on the face of that fact it would appear the existence, or nonexistence, of CON requirements has no effect on PE hospitals charging more and having far inferior outcomes.
Do you have a hypothesis as to why CON requirements are driving inferior outcomes and increased cost metrics at PE owned hospitals? (A hypothesis that accounts for the fact that PE owned hospitals underperform even in the absence of CON requirements.)
Serious question. I'm trying to get my head around this.
Sample hypothesis with only minimal amount of knowledge on it.
PEs seek to make profit, and are looking for places where they can either raise prices or lower costs (which will quickly correlate with worse outcomes) while not losing customers (yes, you could call them patients, but PE will view them as customers), or at least losing so few that the overall numbers result in more profit. One way of doing this is looking for barriers to competition/moats. CON is just one type of moat, and so is one factor PEs evaluate, but the presence or absence of other moats can still override the presence or absence of this one moat. One could try to work this out from data with some sort of regression, but with so many possible moats and a relatively limited number of data points, it would be easy to overfit the data.
In comparison, non-PE hospitals might have some profit motive (or keeping to budgets, not going bankrupt, ect.), but will be less driven by this mentality and thus their relationships to moats will be more complex, and so something like a CON requirement won't be as fully exploited to raise prices or lower costs.
This also fails to account for other ways that PE can seek to make money, which involves more complex parts of law and financing that I'm not well versed on (I've ready some things about real estate, but don't know enough to fairly analyze the claims).
How does this relate to the original post? The original post posits that overregulation contributes to the dysfunction of the US healthcare system. The next response calls for specifics. The comment you responded to provides a specific regulation that may be contributing.
You respond questioning how that could explain why PE operated hospitals have worse outcomes. I agree, this doesn’t seem to have an explanatory power for why PE operated hospitals have worse outcomes, but how does that relate?
Uh, because the original post implied that over regulation was the cause of substandard metrics in PE owned hospitals. It even went so far as to state, "..I'm not surprised by this finding.." after outlining a case for why over regulation was a problem.
Which "finding", presumably, being that PE owned hospitals have substandard metrics.
My question is natural given the context of a discussion that's literally titled:
"Death rates rose in hospital ERs after private equity firms took over"
It's literally the entire subject of the discussion. Why would anyone think it's irrelevant?
I think you misread the original post. It is about overregulation fostering the spread of PE operated hospitals. Not about overregulation causing PE operated hospitals to have worse outcomes.
The material point is that the PE operated hospitals proliferate even in the absence of the regulations.
Yeah, don't you think a. there would be less PE demand for these hospitals if they didn't come with a free state-enforced local monopoly, and b. it would be easier for competitors that don't suck to open up, and c. PE guys could get away with less quality degradation if there wasn't the aforementioned local monopoly?
But PE owned hospitals also suck when there is no locally enforced monopoly. They even suck when it is easy to open competing hospitals.
Let nurses do more, let them write some prescriptions, let them open up a shop that puts casts on people with broken bones and minor things which they mostly do anyways.
Another issue is the requirement that doctors adhere to "standard of care" regardless of cost. If they don't, they are subject to malpractice lawsuits.
Elsewhere, quality of a good or service is traded against cost. But in medicine, there's a cost ratchet as ever more expensive and marginally more performant treatments are introduced.
This is another example of a requirement that both PE owned and non PE owned hospitals, presumably, followed.e (I would hope neither of them were ignoring standards of care in the treatment of patients.) Yet the metrics are substandard at only the PE owned hospitals. So you would need to outline how this requirement unduly burdened the PE owned hospital relative to the non PE owned hospital for it to be the cause of the discrepancy.
There may be such a reason, but you haven't outlined it in your post.
Certificates of need. To reduce costs, we supposedly perfectly plan capacity and prevent over investment.
Should also probably drop requiring an ER for Medicare certification and just directly subsidize ERs.
> Don't hand-wave your claim of overregulation, be specific and name the regulations you think should go away.
Regulations that prevent construction of new hospitals without some sort of "demonstration of need".
This doesn't solve the issue presented in the study. PE hospitals exists in states with and without these restrictions. So while CON might be an issue, it doesn't reconcile the issue of PE. In fact, PE priorities is exactly one of the things CON was setup to handle.
Regardless, you have to explain how removing CON solves the PE issue mentioned when states without CON had the same issues.
You seem to be under the mistaken impression that
- There is a specific list of regulations that cause the problem
- Each regulation in that list is present everywhere the problem exists
Neither one of those are true. Instead, there are many regulations and, combined, they add up to causing the problems. The specific regulations can and do vary by location; but the result is the same.
I think the problem is obsessive optimization of profit at the expense of literally everything else. Greed is bad, especially in a field that is at least in theory centered on taking care of people. You can't take care of someone by exploiting them for the maximum possible profit.
> You seem...
No. You are 100% wrong.
The context of this discussion is PE. So comments discussing this involve PE. So while you are correct in general, you are wrong specifically.
In light of that, I stand by what I said: you have to explain how removing CON solves the PE issue mentioned when states without CON had the same issues.
Maybe this isn't possible, but then we accept that this is not an answer to PE, which again, topic of conversation.
Oh, well that's BS. Urgent care clinics have proliferated like crazy over the post decade or so. The supply to fill the vast majority of urgent medical needs which hospital ERs used to have to carry alone is there. But it's true that that supply often goes unused. Why? Because ERs HAVE to tend to and stabilize patients when they present; UCCs can turn you away if you can't demonstrate the ability to pay.
The problem is not restrictions on medical facility construction, it's inefficient use of what we already have.
In general, America has an issue with defaulting to "building new", as if we have an everlasting greenfield, rather than careful provisioning of the already overbuilt infrastructure base. Capitalists love being freed of prior obligations, with no regard for how they contribute to an even more unwieldy set of obligations in the future. Enough. You can't just do as you like. Help solve the actual problem.
BS, eh?
https://www.health.ny.gov/facilities/cons/
Yeah, that one actually fucked us over rurally. Local healthcare system wanted to put up a new greenfield hospital facility, was turned down for the CON by a challenge from another hospital 30 miles away. They wrenched demands out of the facility to get the CON approved with modifications that basically took away all of the “hospital” from it and basically made it “fancy block of specialist doctors” instead.
Rural/urban split. Many cities instead contend with local politicians who want to put a feather in their cap by giving concessions to developers to build new, expensive facilities (instead of, say, driving that money into actual healthcare or the rehab of existing facilities). What will happen is that the taxpayers will give millions to have a greenfield facility built, and around that time, the older local facility (likely to be servicing poorer residents or those without transportation access) will get shut down. Expanding building doesn't fix this dynamic, it makes it worse.
Yes, BS. Because, as I said, regulations have not stopped the establishment and proliferation of the urgent care clinics that would be intended to reduce the load for hospital emergency rooms. Such facilities do not need a CON if affiliated with an existing hospital or practice. They essentially function as extensions of local ERs for non-critical needs - or, they would, if they were forced to see patients regardless of demonstrated ability to pay, as ERs must. To fix that, you need MORE regulations, not fewer.
That’s just New York, yeah? Does every state have similar regulations?
Slightly more than half have CoN laws and other states have a number of restrictions of facility construction that complicate building smaller clinics.
So, unless every state has a regulation, that regulation doesn't exist and has no effect?
Any other goal lines you want to redraw? Let's get that out of the way now instead of going back and forth.
(To answer: in my personal experience Illinois also has such a regulation.)
How would higher hospital density help quell healthcare costs, though?
Isn't that just more infrastructure, administration overhead and staffing that victims have to pay for, in the end?
No, actually it would be lower for the same reason competition always leads to lower prices. Uncompetitive hospitals that can’t meet need would naturally go out of business.
A “need” certificate is similar to the cap that med schools have - it’s effectively a pricing cartel to keep salaries/revenue high
There are extremely high fixed costs + we require hospitals to do unprofitable work (they aren't allowed to turn anyone away from the ED, for example). In many small regional chains, their profitable hospitals in one area fund unprofitable hospitals in other regions.
Overall we have a crisis of hospitals shutting down, not a crisis of oversupply.
> competition always leads to lower prices
I don't see how this could be true for emergency visits. Would an ambulance drive you to the cheapest hospital within some fixed radius?
Hospitals typically lose money on emergency visits and make it back on scheduled inpatient care and outpatient services. This would accelerate a poor performing hospital's demise, because ambulances will go to the closest one but patients who have options will look elsewhere.
If you now have two ERs within driving range, you have the choice to go to the cheaper one if you are conscious and in a stable enough condition to reflect. This is the sort of thing people already think about in the US.
Here is a summary of a number of studies of the effects of Certificates of Need:
https://ij.org/report/striving-for-better-care/overwhelming-...
But the victims don't have to pay for it -- excess infrastructure is a bad investment that those who built it pay for. The builders are not guaranteed a return on their investment.
I don't really get it.
If you are arguing that the customer is not paying for inefficient providers, then I strongly disagree.
Customers always end up paying for inefficient supply chains. If you end up with an inefficient allocation of hospitals/doctors (local overprovisioning), it's always gonna be the patients that are gonna pick up the bill for this in the end through higher average prices.
Inefficiencies are doubly bad because you potentially don't just pay the pure cost for the inefficiency (middlemen, waste etc.) you even pay for margins on top.
I think the assumption that such inefficiencies could lead to actual savings for customers (by magically making the providers decrease their profit margins) is highly overoptimistic.
> Customers always end up paying for inefficient supply chains.
Obviously not. There is nothing that compels a customer to do business with an inferior competitor, if there is an alternative. The end result of having a sufficiently inefficient supply chain can be that the company involved goes out of business, as it cannot operate at a profit.
Where would you expect bananas to be cheaper: a town with five grocery stores, or a town with one?
1. One accepts only Visa, one only MC, one only Amex, one only cash, and one only accept bitcoin.
2. One offers bananas to walk in visitors, but the others have a minimum wait time of 1 month to a year.
3. One is a mile away. One is an hour away. Still in the same county.
4. None of them offer an easy to understand menu. You can't just order a banana. You ahve to order Banana Services and meet with Banana specialists. You can't take the banana home.
5. You wake up in a banana shop and you didn't get a chance to shop around before being presented with a bill. They don't take your payment of choice, so it's 10 times as expensive.
6. Some won't let you buy a banana. Instead, you have to buy a banana service. Per banana pricing is the lowest here, but the total cost is higher if you just want a banana.
Which banana store do you buy from? A, B, C, D, or E?
I'll take the first choice you make and let you know if you picked correctly. Anything other than the correct choice is a failure.
> Where would you expect bananas to be cheaper: a town with five grocery stores, or a town with one?
I'm not defending the "Certificate of Need" regulations, but your thinking is sloppy: healthcare is not a product like bananas. That analogy will mislead more than it will inform.
If every person has to buy 10 bananas a day or they will die, the town with 5 stores may have more expensive bananas, because they can just raise prices to cover the excess capacity and people will pay.
They can't just raise the prices because people will bring their business to the competition. I've personally done this for CT scans. In my local market we literally got a scan for 2k where the hospital we'd usually go to wanted 10k.
The same works for non-emergency surgery as well. Take a look at https://surgerycenterok.com/ it's such a breath of fresh air to see the full price for each procedure right there. People travel there from all over the country to get needed procedures. So competition clearly works but the system doesn't really enable it. For example insurers don't want to work with the linked center because they won't give them rebates but charge everyone the same price. More details: https://www.econtalk.org/keith-smith-on-free-market-health-c...
> They can't just raise the prices because people will bring their business to the competition.
Not necessarily. They're all under the same pressure. If they all provide similar services with little differentiation, the price will probably settle at a higher level to cover the fixed costs of 5 stores instead of 1.
> In my local market we literally got a scan for 2k where the hospital we'd usually go to wanted 10k.
You kind of get at it below, but I wonder if that's an effect of insurance negotiations (e.g. the hospital you usually "usually go" gave in to insurance discount demands in one area, but pushed back on scans pricing to get the revenue they need to operate).
I do think the totally fictitious nature of posted healthcare prices is a serious problem.
You are over simplifying the problem. First off, the place you quote at 2K is probably an imaging business or part of a larger business that can keep the machines more fully utilized. The hospital has it's equipment to support it's main business. Nobody is going to the hospital for routine imaging. Next, nobody pays $10K at the hospital. Insurance will either have an already agreed to rate or will negotiate it down. As a private pay patient, you can negotiate it down. For planned imaging, a lot of people still won't shop around. Even with a deductible, it should still be the negotiated price. After deductible they all cost the same for most people on insurance. Modern Healthcare isn't a free market. These days insurance has most of the power.
> In my local market we literally got a scan for 2k where the hospital we'd usually go to wanted 10k.
That’s still 4-6x what it would cost at a private clinic in Canada.
If we look at "food" more generically, rather than bananas specifically, we are literally in that situation where every person has to have X amount per day or they will die. And competition still works great.
There are two things that set healthcare apart here. One is that sometimes people need unusual treatments to stay alive that are extremely expensive, and our desire not to let people die is at odds with the normal market mechanism where products that cost too much just don't get purchased. The other is that sometimes people have emergencies so urgent they can't really choose their provider.
But the vast majority of healthcare doesn't fall into those categories, and normal market mechanisms work fine for those. Competition would lower prices for most healthcare just like it does for food and everything else.
I don't think that is a good comparison at all.
Unlike grocery stores, hospital ERs don't get frequent repeat customer interaction, so that makes the competition aspect basically completely inapplicable.
As typical ER visitor,
- You wont know what "quality" of care you are going to get beforehand
- You will have very limited capability of selecting the hospital
- You will be unable to compare prices beforehand
So why would any of those 5 hypothetical hospitals decrease prices?
More competitors won't do shit if the market is uncompetitive by design.
>Unlike grocery stores, hospital ERs don't get frequent repeat customer interaction...
Oh yes they do. I can think of any number of patients I'm familiar with who end up in the ER multiple times a week. Practically daily for some people. And a few who are known for getting discharged from one hospital and immediately heading to another nearby one.
What is a reason to end up multiple times a week in ER?
I have a bunch of people with serious conditions in my "bubble" (spontaneus penumothorax, diabetes, ...) and none of those needed the ER more than ~1/lifeyear.
If weekly hospital visits were typical, competitive free market hospitals would be more feasible IMO but I don't think we're close to that (and I don't want to be, either).
Addicts (usually but not always homeless) with all sorts of drug/alcohol caused health problems that they don't manage. Not to mention overdoses/too drunk to move.
Medically fragile elderly people trying to live on their own when they shouldn't be. Frequent falls with injuries, etc.
A friend of my mothers was in and out of the ER and med/surg floors for months with mysterious cardiac symptoms that ended up being a new reaction to a medication she'd been taking for years.
People who are just psychologically, hmm, needy and looking for attention. When I worked on an ambulance there was a lady who'd call weekly because she said her blood pressure was high (it never was) and we couldn't refuse to transport her.
And more...
What is a reason to end up multiple times a week in ER?
This happened with a friend's mother during her last year of life. She had dementia, cardiac problems, infections, breathing problems, a whole litany of symptoms of slow death. But she didn't have any one clearly terminal condition (like late stage cancer) that would justify a switch to hospice, so she lived in an assisted nursing facility and also had to go to the ER more than 70 times in that last year. It was horrifying for everyone and the costs were astronomical. The state is now trying to seize her daughter's house to partially offset the accumulated expenses.
How could you even compare prices?
If you go in because of a killer stomach ache you could end up needing a CT and emergency surgery. Or you could end up getting some pepto-bismol.
And if you are taken there by an ambulance (which you also have no ability to compare any price to). You'll be sent to the hospital the paramedics decides to drop you off at.
There is an inherent complete lack of information when going in for a medical situation that can't be fixed by the free market. You need (or believe you need) treatment now. There's no way for you to know what that treatment will be.
Even going in for an annual physical can be the exact same. Some dicey numbers on your blood work and you might be looking at some huge unplanned bills that are completely unavoidable.
That's exactly my point.
Number of competitors is only one of the inputs for how competitive a market is, and price intransparency + lack of information on treatment quality make it moot for the healthcare sector in my view.
I don't think higher hospital density would hurt, but we would have to pay for this and I don't see it help drive down prices.
An ER is only a small part of what a typical hospital provides. And life-threatening, must-get-treatment-immediately-or-die emergencies are only a small part of what a typical ER provides.
Yes, there are some kinds of care that aren't very amenable to competitive market forces, but the vast majority is.
That's what reviews and word of mouth are for. Don't you do research before picking a hospital and doctor?
We do need price transparency though.
> Don't you do research before picking a hospital and doctor?
No. Preventing rapid unplanned end of life is the main purpose of hospitals in my view.
Enough time to make a choice of hospitals (or even to collect information on specific hospitals) is a luxury that I would not expect patients to have.
For every emergency I plan a visit to the hospital at least 10-20 times. Emergencies are the exception, by definition. I think everyone with health insurance, which the Census Bureau says is 92% of Americans, since they will not go directly to the ER.
In the town closest to central america.
The labor to produce, ship, and shelve the banana determine it's cost along with whatever margin the store that sells the banana is willing to take. Walmart, for example, could be perfectly willing to sell a banana at a loss if they think that will get you in to buy a TV.
This is why dollar stores exist and often kill off local grocers. They can sell a lot of non-perishable goods at a loss and win back by understaffing the location and overcharging on non-perishable goods.
I live in a city with probably around 50 different clinics, but they are all associated with 3 major medical groups. It isn't a lack of buildings that's preventing competition.
My expectation on cost of banana will be more on how much it costs to ship to said town? Similarly, which town has higher tax burden to cover? Assuming any sort of health inspection on places that store food, the town with more stores has a higher burden.
Which is all to say, my gut is it is far more complicated than that allows for. Not a useless model, but also not a very actionable one.
Exactly. The more suppliers are in a market, the more competition there is. Thus lower prices and a better selection. People don't like a monopoly is other areas of life. Healthcare is no different.
The town where you can see the banana prices on the shelves, if not online, and where there's a collective refusal to pay (perhaps through an organizer payer) if the price is too high.
I mean, that depends. A town with ten people and five grocery stores will be inefficient, and probably have very expensive produce as a result.
A town with ten people won't have five grocery stores in the first place. Nobody's going to spend a bunch of money to open a store in a place where there isn't a customer base to support it.
> Nobody's going to spend a bunch of money to open a store in a place where there isn't a customer base to support it.
Tell that to the waves of cupcake shops, craft breweries, and now cannabis dispensaries in my area.
Right, luxury items are definitely an apt analogy here. Man, people really do love to argue, huh.
The point is that business decisions aren't magically correct. People can, and do, open stores in oversaturated markets. When your cupcake shop flops, that's sad; when hospitals close, that can be devastating to a community. It makes at least theoretical sense for states to try and prevent that impact.
Avoid the impact from hospital closures by preventing them from opening in the first place? Hospital closures are devastating if they're the only one in the area, or remaining facilities don't have enough slack. They aren't devastating in an oversaturated market.
> Avoid the impact from hospital closures by preventing them from opening in the first place?
Yes? That's the idea. I won't say it always works, but it's the idea; preventing the existing facilities from closing.
> They aren't devastating in an oversaturated market.
It certainly can be, if the oversaturation puts all of them on shaky financial grounds.
There is such thing as market failure due to oversaturation.
That's like saying "it's ok if I shit in the river, it's a big river". When a million other people do it you've got a water quality problem.
Each and every one of these regulations can in abstract, be justified by some useful idiot looking at only the first and second order inputs and outputs and not looking at the totality of the effects.
Nobody with a brain would defend shitting in the river, but here you are asking for individual turds so that they may be justified on the basis that the individual dropping them was relieved and their individual impact on water quality was minor.
No it's not. Shitting in a river is always a net negative. Regulations can be positive, negative, or ineffective. Trying to "just count" the regulations to determine quality completely discards this critical dimension and betrays an almost childlike view of the world.
>Shitting in a river is always a net negative
It beats anything open air by miles. Sure, an outhouse would be better but river > street.
>Trying to "just count" the regulations to determine quality completely discards this critical dimension and betrays an almost childlike view of the world.
You're grasping at straws here. I am under no obligation to give such an infantile opinion (the one I initially replied to) a response at length. This is not the venue for such minutia.
> I am under no obligation to give such an infantile opinion
Responding with “I know you are but what am I?” is just proving my point.
FDA drug approval processes and insurance regulations.
> FDA drug approval processes
What, specifically? Just abolish them all, and return to the pre-1938 status quo (e.g. marketing radium water to cure what ails ya)? Or specific reforms to make the drug approval processes more effective?
https://en.wikipedia.org/wiki/Radithor
> (e.g. marketing radium water to cure what ails ya)?
Sounds like something the current US health secretary might actually like.
Best way to make the entire process more efficient would be centralizing R&D and approval and nationalizing the manufacturing of drugs. MAYBE you could license out the rights to produce drugs on 10 or 20 year license agreements.
Turn it into a pure R&D effort and not one driven by profit.
Who is gonna decide how the R&D money gets spent? What's their skin in the game and their feedback mechanism? Why will they do a better job picking what to research than current pharmaceutical companies?
> Who is gonna decide how the R&D money gets spent?
Same way the NHS previously funded medical research. Grants and grant review. You can expand that department and effort.
> What's their skin in the game and their feedback mechanism?
Believe it or not, some people just want to research and look into cures for diseases. Shocking I know. Feedback can be reviews of their work and blackballing bad actors that consistently kick out bad research.
> Why will they do a better job picking what to research than current pharmaceutical companies?
Because they already are. Pharmaceuticals aren't doing the majority of research, they are taking NHS funded research and running it through FDA approval.
Ozempic, for example, didn't come from pharmaceutical research, it came from grant research into lizard spit.
I used to believe in the efficiency of publicly funded research, especially for things that have no direct path to economic returns. My canonical example used to be particle physics. It promises incredible breakthroughs but commercial application is faaar down the road and the risk profile is crazy. The Sabine Hossenfelder convinced me otherwise: https://youtu.be/htb_n7ok9AU?si=fJ7B8QALLm3Vy-_W
I don't think we should cut all public funding for research, but we also need private research. While semaglutides were discovered in Gila Monsters a long time ago it was Novo Nordisk that put in many years of leg work to actually turn it into something useful for humans. The more interesting argument might be that Novo is controlled by a non-profit org.
> Who is gonna decide how the R&D money gets spent? What's their skin in the game and their feedback mechanism? Why will they do a better job picking what to research than current pharmaceutical companies?
Pharma companies are pretty terrible (e.g. pricing a cure for a kind of hepatitis just under a liver transplant, not because it costs that much, but because they can make the most money that way even though access is severely restricted). Getting rid of that market-driven terribleness may be a enough gain to justify the reform.
Personally, I'm so sick of the business-all-the-things approach and its well-known failure modes that I think society needs to put some effort into making other models work. Either straight up nationalization (with perhaps internal competition between research centers), or stricter oversight (e.g. putting government officials, patients, etc. on pharma company boards with enough power that the shareholders have to take a back seat).
Somehow the pharma industry still doesn't bring in that much money. There is a reason we aren't all in pharma funds.
I summarize it with one word after talking to a hospital billing manager. Subsidized costs. If you cant pay someone else will be receive marked up prices. On top of that and bear with me, but the way health insurance works feels like you gotta be in the right “mob family” where each provider is different in leverage in conjunction with which employer you work for. They can just take hospitals out of their “network” if they dont lower costs, so small businesses dont get this level of leverage, but employers with large numbers of employees do. You could have someone with a drastically lower bill just because of where they work, not even related to how much they make mind you.
It all goes back to your healthcare costs being subsidized by those who are left with the crappy end of the stick. I think transparency in hospital billing is drastically necessary. If not for every single surgery out there at least for all the really standard things that arent so complicated.
I am not a doctor. I think healthcare can be fixed without throwing more government money at it, but we need people to understand it better and work out how to bring costs down.
If you are not aware yet, if you think you need to go to the ER think about what you NEED, is your arm broken? This sounds crazy but find a lab that will xray your arm. It will cost way less, and sometimes the insurance will pay the full cost of labs for you since you saved them a fortune. It sounds dumb, but it could save you so much financially. If you are in more urgent needs dont waste any time go get the care you need.
If you are not aware yet, if you think you need to go to the ER think about what you NEED, is your arm broken?
Just noticed this comment. Wow, free ideology seems to turn people into monsters. "No you" (in kids voice). You diagnose your own heart-attack/kidney-failure/etc. I'll take a professional.
What I mean is, is it something where you know you need an xray, but arent like bleeding out, etc if you're unsure, just go to a professional, but if you are 100% confident you can save yourself the headache of hospital billing, definitely do.
No one is 100% sure of medical diagnosis, jeesh. Quite a few people ignore the symptoms of serious diseases until its too late and others go in for minor things.
Not even medical doctors can sure of a diagnosis, where of themselves or others. And the average person lacks the knowledge of a doctor.
I disagree with your analysis. I think you are wrong.
Health Care is a natural monopoly like an electrical system. Basically, a large portion of health care the creation of infrastructure that everyone benefits from. An MRI machine or whatever is benefit to everyone since everyone might need it even if only some people actually use it, etc.
For that reason, the cost of procedures, infrastructure, etc, etc. are infinitely debatable and there is no true way to way to assign costs. And sure, the actual assignments are irrational but framing this "things are subsidized" has things exactly backwards.
Here's scenario - suppose electrical companies weren't responsible for maintaining their own grids and homeowners had to individually maintain insurance in the event of a pylon going down. Suppose if you didn't have insurance and could be tagged as the last user of a substation, you could in-hoc for the entire cost of repairing a pylon or whatever. This would only approach the irrationality of private medicine but I think it illustrates the situation. (and the finance system might manage to put that in place too if we're not careful).
Why are we talking about deregulation when the topic is the ill effects of unregulated rentier profit seeking behavior of PE firms? We need to make debt loading and dividend recapitalization of hospitals illegal. Let them hollow out Neiman Marcus and Dunkin doughnuts, I don't really care. But financial engineering should have no place in our healthcare system.
Because the PE firms are exploiting a broken regulatory system, obviously.
This actually sounds a lot like the US problems with energy (electrical, gas) infrastructure and also things like telephone and internet providers.
They've almost always got a state approved monopoly or duopoly and then magically the state always allows them to raise their rates.
"Regulatory capture" is a nice euphemism for the problems that a corrupt political environment creates. It is corruption that really hampers the creation of a fair and competitive capitalistic market.
Regulation can indeed be balanced to create a fair and competitive capitalistic environment. A great example of this was the telecom industry in India during Dr. Manmohan Singh's government. Both the economic and telecom policies created a very booming and competitive telecom industry in India, with many foreign and local businesses trying their best, to be the best. It also ensured that the technology was accessible and affordable to all, providing a further fillip to the indian economy that increased connectivity delivers in a society. Contrast that 2+ decades later with the current telecom industry scenario in India where only 3 major private players (and 1 government owned company) survives today due to flawed and corrupt policies of the Narendra Modi government. (As the government owned telecom enterprise now doesn't really "compete" with the private players, the 3 private players have already formed a cartel to dictate pricing, and keep gouging the public, with increased pricing, with the connivance of a government that believes in oligarchy vis the South Korea Chaebol model).
And let's not ignore that regulation is necessary in a democracy because capitalists are only (rightly) focused on creating capital. But obviously they are not the only contributing members of a society (nor, do I dare say, the most important ones) and the rights and needs of others in a society are just as important in a democracy. That is why everyone today also realises that things like monopoly, hoarding or black marketing, for example, aren't good for the overall well-being of a society, even if that's how capitalists can derive "maximum" value (i.e. make the most profit). History says that imperialism is the capitalist model that delivered peak "efficiency" in terms of deriving the maximum "value" for the (low) capital invested in it. But obviously, imperialism, even in its limited form today, is not compatible with democracy or concepts of sovereignty.
The problem in the US is there are too many rich people devoid of morals and less rich people who support them and are brainwashed into ideological opposition of most or all regulation and government without nuance. Furthermore, Americans in aggregate condone being ruled by extreme inhumanity, corruption, stupidity, and greed by lack of effective objection. It's like an old-school third-world country and Americans either don't realize how bad they have it or lack the courage to do anything about it.
'Your appendix is my pension plan dividend'
My impression is a lot of US health care problems are caused in part by a sort of unholy combination of restricted competition and access, together with profit driven market participants.
That is not wrong, literally stated. But know a lot of hn people imagine that this means making things completely unregulated might be one reasonable alternative. The obvious problem in this case is scams and unsafely/deadly treatments. Here, one can point countries with functioning, lightly regulated systems. The problem is that these countries depend on cultural and institutional factors keeping people honest, keeping fake medicine at bay, and etc.
But the US has a cultural of religious irrationality coupled with huge, profitable and predatory organizations (the ones soaking health care dollars as well as alternative medicine cults and scammers). Before the last hundred years of regulation, 1910 or so, unregulated US medicine was a deadly, heroin soaked shit show and if you back to that, all the "alternative" scammers along with Stackler types are ready to jump in to try to equal that situation.
Yes, or government intervention that looks good on paper and disastrous in practice.
Somehow people have this notion that healthcare should be treated differently than other service industries.
I would argue that the least amount of government control yields to the best result. There is only the size limitations (antitrust) that had potentially good outcomes. We could simply ban m&a above a certain size and make the externalities have an impact on revenue and that would be probably enough.
Somehow US citizens have this notion that healthcare is a universal problem and that US-problems are not self inflicted.
Everywhere else in the civilized world, you pay less and have better service. The US has the highest degree of industry meddling, most middlemen cashing out and the least governmental regulation. You are objectively being lied to.
Disclosure: I'm a physician.
One popular approach to saving money is to replace physicians with nurse practitioners and physician assistants, who have less education and training. The article does not discuss this element, and I'd be interested to see if that is a factor in patient outcomes. There's less data on this than you might expect.
ETA: From my post lower down, adding for visibility:
[The training gap is] quite a lot more than a year - in primary care, it's more like four additional years of training for physicians, and 15000 supervised clinical hours for physicians (vs 500 to 1500 hours for NPs). The gap can be wider in other physician specialties, because many have longer residencies than the primary care programs. For example, child psychiatry training is four to five years (depending on the route you take), making it longer than the three years of family practice residency.
Here's a chart looking at training for MDs vs NPs in primary care. It is from a physician organization. https://www.tafp.org/media/advocacy/scope-education.pdf
I unfortunately have had to be in and out of medical offices and hospitals recently - and I feel like compared to 10-15 years ago practically everyone I deal with is a physician assistant. Nothing against them but it's kind of annoying that it's almost impossible to actually talk with a doctor anymore.
I get it they're probably overworked too and their time is valuable but it's not quite as reassuring not actually interacting with doctors very much. The few times I have it was literally for my actual surgeries and surgery pre-appointment. Practically everything else is some assistant.
It’s at the point where we might as well be seen by a CNA who takes blood for the blood test and have the AI assess it (you were too soon my dear Elizabeth Holmes). If we were to just measure the situation, how can we say first-level medical care got better if people are literally no longer seeing doctors?
What does that look like in a more intensive hospital setting? I've seen the shift to midlevels happening in primary care, but I'm not sure how that translates to inpatient settings - I'm vaguely aware that there are rules around when a PA/NP must consult an MD before making a decision, and I feel like they would encounter those situations way more for an inpatient.
Many states now have unsupervised, independent practice for PAs and NPs from the first day they are issued a license. There is variation by state, however, and some still require physician oversight. The amount and quality of that oversight also varies considerably.
Don't worry, MAANG-affiliated startups backed by private equity will work on a way to replace MD/DO/FNP/PAs with AI chatbots so patients can have the full Idiocracy experience while paying zillions for the privilege.
The next step is going to be turning over primary care to AI. Doctors will be mostly reviewing cases or consulting when the AI decides it's sufficiently nececessary.
I mean we are talking what another year in school? Surely those outcome differences are gone once the nurse or pa is in the field for a couple of years.
It's quite a lot more than a year - in primary care, it's more like four additional years of training for physicians, and 15000 supervised clinical hours for physicians (vs 500 to 1500 hours for NPs). The gap can be wider in other physician specialties, because many have longer residencies than the primary care programs. For example, child psychiatry training is four to five years (depending on the route you take), making it longer than the three years of family practice residency.
Here's a chart looking at training for MDs vs NPs in primary care. It is from a physician organization. https://www.tafp.org/media/advocacy/scope-education.pdf
I have a family member who is an NP and her biggest complaint is 20 years ago, most NPs were RN who had 5+ years of RN experience then returned to school vs current Undergrad -> NP -> licensed cutting out that practical experience. You think NP would be better if licensing required certain amount of RN clinical time?
I have heard the same concern about undermining trust from some NPs who completed their training before this more expedited route was available.
So then after 10 years on the job there would hardly be a difference in other words.
I would argue that supervised training with regular feedback on performance is different than job experience, but certainly both are relevant.
Or how about - train more physicians. It is one of the most critical and in-demand professions yet the most artificially gatekept. Doctors will endlessly compain about working conditions and patient load but still not agree to this because they know it will devalue their own labor.
Major medical organizations have been advocating for years for more physician residency spots. Unlike NPs or PAs, some residency is required for physicians to be licensed.
Right now, there are not enough residency spots for every US med school graduate.
The AMA very successfuly lobbied to reduce the number of medical schools, cap federal funding for residency and cut the number of residency slots 20-30 years ago, and we are now dealing with the fallout of that. It has softened its stance in recent years, sure, but even if we fix all of this today (doubtful because of the usual political gridlock) it will be another couple of decades before the situation will actually improve.
Serious question: is there a single example where the customer experience has improved after private equity took over?
Usually when a company sells to private equity, it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option.
That is often not true. My former dentist had a nice family practice that made very good money. Then a PE company came in and offered a ton of money which was an offer he couldn’t resist. The PE slowly took over more and more small practices in the area until they had a significant market share which allowed them to raise prices and reduce service. Patients didn’t really have anywhere else to go. I see the same happening with vet practices. The big corps are buying more and more small practices so you basically have almost no other choice than paying higher prices.
> Then a PE company came in and offered a ton of money which was an offer he couldn’t resist.
He is going to retire sooner or later and what then?
There is a cultural paradox where it's socially unacceptable to profit too much from a necessary good or service, but you can profit as much as you want from non-necessary goods and services. In the past, this pressured small practices to keep their service standards high and prices relatively low. However, due to the accessibility of information and finance, rather than start your own medical practice, you can become similarly wealthy with half the work just by being employed as a doctor/dentist and investing your money in an ETF. Of course, people with money swoop in to "correct" the mismatch in supply and demand, which leads to worse service and higher prices.
The knee jerk reaction people have towards these situations is to "punish greed", but that doesn't change the underlying market forces. Much like rent control, it may work in the short term but makes the problem worse in the long term.
You claimed:
> Usually when a company sells to private equity, it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option.
private equity being able to offer more money for your practice when you retire than a dentist who would have continued the small practice is not financial hardship or being unable to find a successor, so please don't pretend your two comments are equivalent.
This comment is much more honest: there was room for financialization, so people did it. They were unable to find a successor who would pay more than a group of people that wanted to wring money out of their company. Gives the lie to the "selling to private equity would be the least bad option" conclusion, though.
Sure you could voluntarily sell your business at less than its market worth to help a younger dentist, but someone else with the same net worth could donate the same amount of money to help the young dentist as well. Why is the expectation of social good placed entirely on you?
You wrote
"it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option."
It should be
"PE offered by far the most money and will make up for it by raising prices and reducing service"
That's exactly what happened with that dentist practice. For years I went there, got a cleaning and was told "keep doing what you are doing". After the takeover they found some problem with almost every visit and fixing it coincidentally would have cost exactly the $1500 my insurance was covering each year.
An act being incentivized doesn't make it good, only more likely to occur. Both the act and the incentives can be opposed.
Or they merely want no job and a huge pile of money. That is super common too.
I'm not sure that simply stopping business is categorically worse than selling to a malevolent entity instead.
Closing down the only nearby hospital is generally considered worse.
This is about providing life-saving care, not Toys R Us.
As a first order approximation, closing down a nearby hospital and sending patients to one further away is only worse than PE if PE doesn't worsen care to such an extent that more people die there than would've en route to the other one. And most companies aren't about lifegiving care anyways.
The commenter spoke specifically about the lone hospital in an area. e.g. rural areas
Hospitals in those areas tend to not offer as high quality of care as most urban/suburban hospital.
When the only hospital in an area closes, it's not just a matter of going slightly farther out for care. In many cases, it's just not possible for people.
This is a big issue with the idea of socialized health care as it could happen in America. Right now we already have a two (or three) tiered healthcare system: one for the "rich" meaning urban and suburban and one for the "poor, remote, and/or rural".
When people talk about socialized health care they rarely if ever talk about how to keep such a system from getting worse.
So when a rural hospital closes down, you can expect a higher death rate in the local population. Not to mention the economic impact of losing what is probably the highest paying employer around and all the fallout that comes from that.
Well yes, that's the whole point of ambulances and such. More people will die because minutes matter.
And this whole topic is specifically about companies in the business of livegiving care. Hospital ER's.
This is so untrue I don't even know where to start...
Source - have sold my business to PE and have advised on 900+ companies who have sold to PE firms.
In common parlance, "private equity acquisitions" refer to B2C companies rather than B2B companies where there was never of stigma of financialization to begin with.
It's possible you're right as I'm also speaking based off vibes, but my argument remains the same. Those who sell out for a quick payout would eventually fall into the category of "the current owner is unable to continue to run the business and cannot find a successor" when they hit retirement age and their kids would prefer easier/safer/higher general market returns.
I'm not at the retirement age and I was able to continue to run the business, yet sold to PE. How do you explain this?
Also, see my comment below. Feel free to list out all of the companies from those portfolios that match your criteria. I'll wait patiently.
Like I said, I wasn't talking about random B2B startups, and you're going to hit retire age someday. I don't understand what you're arguing against. If we lived in a place that is hostile to "private equity", the majority of the companies you listed never would have been started in the first place.
> you're going to hit retire age someday.
I mean so is every owner, whats your point?
This is such a weird argument...
> I don't even know where to start...
Literally anywhere is better than just hand waving the parent statement away with nebulous, unverifiable claims of your own experience.
Here is a few examples of PE shops and their list of portfolio companies. Please name all of the companies that fit the criteria of "the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor"
https://www.ta.com/portfolio/investments/
https://www.accel-kkr.com/portfolio/
https://frontiergrowth.com/our-partnerships
It's not a matter of anecdotes. All you have to do is look at what PE is. It's financial engineering done to increase EBITDA for resale. There is nothing in the PE model incentivising improved outcomes for customers.
PE gets a bad rap and for very correct reasons (especially at the large cap where financial engineering is rampant). However, there are a ton of examples where PE does add value and the customer experience improves. However it's impossible for me to list them because your definition of customer experience improvement might be very different than mine. So this point is generally very moot unless we can all agree on a standard quality metric for "customer experience".
Go ahead and give some examples according to your personal metric for customer experience.
Good customer experience is generally associated with receiving good value for the money, and not feeling like you're getting screwed.
Yes which is the definition of something that is very subjective. What you deem as "good value for the money" may be very different than mine...hence my comment.
Can you list some anyway? I'm curious about your perspective
Apax Partners rolled this companies together: https://www.authoritybrands.com/about-us/
I use ASP for my pool cleaning and they referred me to their electric company (Mr Sparky). Both have been excellent services and I was able to receive a discount on Mr Sparky, because of the existing relationship with one. Seems like a win:win for everyone.
yes lastpass is not hacked since PE took over. So something bad product is now ok
Yes, when the customer also happens to be the equity manager, so the customer coincidentally gets a big stack of cash. ;-)
Privatize the profits and socialize the losses, is this too difficult to understand of being the core motto of a private equity firm. A PE firm will not have patients at the top of their priority, unless legislation enforces and regulates that.
This is essentially just how capitalism works. Money is the only priority. So in ANY market where the financial incentive opposes human well-being, humans will suffer. That’s true in healthcare, where we’re often getting a worse product which is more expensive. While in other industries like consumer electronics, the incentives are aligned and humans are getting better products for cheaper.
The PE firm is a great representation of why monopolies eradicate the positive incentives in capitalism.
And this only happens after a long time and companies have had a chance to centralize vast amounts of money and power. Since there is no point that’s “good enough,” these massive companies are forced to continue growing by cutting costs (worse services, lower salary, fewer employees, closing locations) or doing absurd tricks like stock buy-backs to make their shareholders and executives very wealthy.
It’s literally impossible to avoid this situation without strong consumer protection and anti-trust regulation because the incentives for massive companies are so deeply unaligned with human well-being and society’s best interests.
We can either take strong action against massive companies or accept that this trend will inevitably get worse. It’s called late stage capitalism for a good reason
> Health care has been a focus of the financiers because it accounts for 18% of gross domestic product in the United States.
This seems extremely high.. Ireland with free public healthcare for example is ~6%.. I think the largest in Europe, by a lot, is Germany? ~13%.
People assert all sorts of nonsense in response to questions like this, usually not at all backed up by the data. The drivers of high US healthcare costs are:
All the other factors are noise. Insurance companies extract a few percent, bureaucratic overhead extracts a few more percent. But to get to 100% more, these just don’t matter.Worth noting in this context that the scarcity of doctors is artificial, due to a low cap on the number of federally funded residencies. We could also let more doctors immigrate. My understanding is we make immigrant doctors go through a lot of hoops to validate their foreign training.
https://thedailyeconomy.org/article/how-congress-created-the...
For the last few decades the only way to find enough doctors willing to work in rural areas in America has been through H-1B. With the funding cuts in the "Big Beautiful Bill" and upcoming $100K visa fee a large chunk of Americans are going to find their quality of healthcare deteriorate very rapidly.
> ...bureaucratic overhead extracts a few more percent.
Respectfully, my perception contradicts this. My GF has been a psychologist for 25 years. For the first half of her career, funding for her work was provided exclusively by a state program (California), but about 10 years ago, the funding transitioned mostly to private health insurance. And it's been a bureaucratic nightmare every since. She had to hire a skilled/well-paid FTE just to manage the billing with the private health insurance companies. And it's still a nightmare to deal with. So yeah, to downplay the "bureaucratic overhead" of private insurance, is not universally accurate, IMHO. Maybe for big hospitals, it represents a small percentage of overheard, but not for smaller providers.
"A few percent."
> There are no official data on their total size, but estimates extrapolated from micro-costing studies suggest that billing and insurance-related services alone comprise about 15 percent of health care spending, and total administrative costs may comprise about 30 percent.
1. https://econofact.org/how-large-a-burden-are-administrative-...?
re: your third point. Americans drive frequently and walk infrequently. It's the same reason why Canada and Australia have similar rates of obesity despite having vastly different approaches to healthcare.
I'm not going to bother fact checking a random comment without any sources, but regarding your second point: do you think "the rest of the world" gets drugs for free?
anecdotally, my cost (without insurance) for a prescription medication (for a family member) in Austria was less than my copay for the same medication with insurance (BC/BS) in the US.
It's not free, but it's shockingly less expensive, and there are cheaper countries in the EU than Austria.
It's not for free, though low enough to where no biotech company would make a profit on new therapies at the current R&D spend if the US paid the same rates that everyone else is paying today. This goes for firms on any continent, and a large part of why FDA approval is such a big deal for the international medical enterprise.
We could trade reduced innovation for lower prices, but that's a difficult ethical debate to settle given the prevalence of medical suffering from lack of effective therapies.
The solution I personally petition for is looking for ways to make drug development more affordable across the board.
> It's not for free, though low enough to where no biotech company would make a profit on new therapies at the current R&D spend if the US paid the same rates that everyone else is paying today.
Where are all the anti-taxes people on this apparent involuntary charity for the pharmaceutical industry?
Some of this may be correct but writing off administrative overhead as negligible is laughable.
Insurance companies spend a maximum of 80-85% of collected premiums on healthcare, and only because this is regulated by law, otherwise it would be even less.
On the other side hospitals, clinics and private practitioners all have dedicated departments and staff whose only job is to deal with billing and negotiations with insurance providers. That also costs a hell of a lot more than a couple percent.
So just adding up these two there's 15-30% of medical expenditure that isn't going towards actual care, just overhead. Recover this cost and the US will immediately fall in line with how much the rest of the developed world spends on healthcare, even with the high doctors salaries and drug costs.
This is one of those comments that make me wish hn gave out a daily use “super upvote”.
I’d only extend that point 2 is true for many cutting-edge treatments beyond simply drug development & is tied to point 1: If you pay doctors top-flight salaries, you get a lot of smart, innovative doctors pushing (at great cost) into the future of medicine.
Similar story with admins working to make care more efficient and also humane, data science teams (yes, big research and academic hospitals have these in spades!) …
America is rich and wants to spend that on medicine. It’s not a conspiracy of oligarchs.
There are definitely things in the system that drive prices up (like lack of competition (see CON) and middle men). However, a big reason you see this high cost and difference between countries is Baumol cost disease. Productivity and salaries in the US are very high. Meanwhile healthcare, like education for example, has seen very low productivity improvements. This leads to an ever increasing price. It's unintuitive because the healthcare workers didn't get more productive. However, they could be more productive elsewhere, so comp needs to go up to stay competitive with other options available to the workers. One might argue that nurses for example still earn very little, given how hard and important their work is but that's precisely what you'd see in areas affected by Baumol. The comp only gets dragged up to keep people from quitting or striking. There is little to no competition for something like a "10x nurse" because that's not a thing and the industry struggles to keep justifying their high prices while TV prices keep dropping and dropping and cellphones keep getting more impressive.
The problem is that it's an inelastic market. So sellers can basically charge WHATEVER they want, constrained only to the line where people will revolt. But that's a very high line in the US.
Health providing shouldn't be a for-profit endeavor. Certainly shouldn't be in the stock market and it absolutely shouldn't be comingled with "insurance"
> The problem is that it's an inelastic market. So sellers can basically charge WHATEVER they want, constrained only to the line where people will revolt.
What keeps me from bringing my business too the competition like I do in every other market? The main constraint I see right now is that there are very few, but large hospitals and my insurance only pays for me to go to even fewer of those. However, competition already works (if the patient makes an effort) for some planned procedures like CT scans where you can safe up to 80% in my own experience.
It’s hard to compete on price when your customers don’t know any of the prices up front.
Definitely true. However, it's not intrinsic to healthcare. We made it that way. You can go to https://surgerycenterok.com/ and see all-inclusive prices for surgeries right now. Some people fly there for procedures. They have higher success rates than competitors, surgeons take more money home and the procedures cost less. It's possible.
Maybe they're referring to the way the system is set up. You're probably not going to shop around for the lowest cost heart surgeon unless you have no insurance. Will they even say how much they charge? Couple that with emergencies. I think the only hope for America is a movement to stop a lot of this stuff before they become issues. Early diagnosis of cancer, national movement to unfat America (whatever that mean), people feeling more responsible for their own health inasmuch as they can.
Availability of prices is definitely an issue. Many, many things aren't emergencies though and arguably many of the expensive ones aren't (cancer treatment, many great procedures once stabilized). My wife used to work on healthcare and has helped friends and family shop around for cancer treatment and heart surgery. However, due to the lack of price transparency this was limited to shopping for quality. We could totally change that though. See the surgery center of Oklahoma website I've linked in several comments
Getting approval to build a new hospital seems to require regulatory stuff and how do you get the staff if there's a cap on how many doctors can be trained a year?
I am not saying we have a functioning or free market right now. I am arguing that competition can bring down prices if we allow it to.
Just noting the other constraints on it like the AMA
Part of it is that Americans consume a lot more healthcare than other countries. They take more medication. They take more cutting edge medication (e.g. it's rare GLP-1 agonists to be used for weight loss outside the US). They see more therapists and chiropractors. They are more likely to stay in private hospital rooms.
Much of this is heavily subsidized by insurance. Any drastic change in the status quo would inevitably cause pricing and coverage that people are used to be adjusted, which is why they say they want healthcare reform until it actually happens.
US healthcare expenditures are ludicrously high, because the US healthcare “system” is ludicrously inefficient by global standards.
US public healthcare expenditures are similar to what some developed countries with fully public universal healthcare have—and the private expenditures on top are more than the public costs.
People sometimes joke about the US having gaps in healthcare because of defense or other spending, but the fact is the US effectively pays vast amounts of money to create those gaps, rather than having them because of some resource constraints.
There is a lot of skimming at multiple levels. Far too many middle layers and gatekeepers, constantly haggling and looking for more ways to profit. Continuous market consolidation to fewer players looking to exploit economies of scale over decades. Perverse incentives everywhere.
There are still people trying to behave ethically within this framework, but it's hard when the framework itself is so corrupted by profit motives which should never have been there in the first place. Direct providers should be running the show, not financiers. They need to be aware of how to balance the books within reason and be paid properly, but beyond that it should be much more patient focused. We definitely don't need so many profit-taking leeches in all the places we have them now.
Fun fact: Public healthcare spending in the USA is at about 7% of GDP between Medicare, Medicaid, and military healthcare. The US governments spend more on healthcare as a percentage of GDP than many countries spend giving it to everyone.
> The US governments spend more on healthcare as a percentage of GDP than many countries spend giving it to everyone
Is this a product of inflated prices ? Or is this research funding for example ? I'm curious what the complete definition for Healthcare spending actually is.
Research funding is a rounding error.
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
$965B is Medicare - healthcare for old people
$885B is Health (aka Medicaid) - healthcare for poor people
$360B Veterans Benefits and Services - at least half of this is healthcare for active and retired military (subset of federal government employees)
The healthcare for non military federal government employees is not included in the above amounts, nor is the state government and lower government level spending on healthcare for employees.
Combine the above numbers with $1.45T in Social Security (cash given to old people), and all other US federal government expenses pale in comparison to wealth transfers to old and sick people.
It's not high considering how much more it costs to get medical care in the USA and the poor efforts by insurance companies and health care in general for pre-emptive care, also US in general is not as healthy as the other Western Nations, where that fault lies I'm not sure (self or general availability of care).
Nothing shocking here. The private equity recipe is pretty simple: 1) Buy a profitable business 2) Increase the margins overnight by removing costs or increasing prices 3) Suck the blood out of the business until it collapses. 3) Sell the carcass and write it off. 4) Rinse and repeat.
Maybe the next Democratic president will use the newly confirmed limitless executive power to reshape our healthcare system. Remove limits on creating new hospitals, eliminate the AMA, add in a public option for insurance, drop the age limit for Medicare to 0, etc. There are plenty of opportunities to use the power for something good.
Obama couldn’t manage to get that passed through congress and had to settle for the AMA as compromise/step-1 except the other steps were dead in the water.
Any chance you mean the ACA? (affordable care act). GP I think is talking about the AMA as a body that artificially constrains the supply of dr's (at least that is my guess as GP also mentions reducing limits on building hospitals).
IMO the GP is touching on removing regulatory burdens (more traditionally republican/conservative ideas) and adding in funding/care via medicare for all etc (democrat position). the combination of reducing/improving/simplifying regulatory burdens while increasing government spending seems to be a combination of ideas that hasn't been winning enough support. afaik, Ezra Klein in his book Abundance is one of the only voices trying to push this balance.
Yes, I meant to write ACA and that's what I (mis-)understood OP was talking about.
Hence the comment about the supreme court. The game has changed if you haven’t been paying attention.
While I agree it would be a wonderful thing to stop connecting private equity and profit generally to lifesaving care. It won't be an establishment Democrat that does this. They wanted this current system, and they still want it, just softened. Gesturing at a public option during campaigns is just part of the performance. (Excepting Sanders and perhaps Warren) I'd be so so happy to be wrong about this.
> Maybe the next Democratic president
As opposed to the 12 years of democratic presidents in the past 2 decades?
The supreme court has created functionally a despot recently. Imagine if Obama had this power. We’d all have universal healthcare already.
If Obama was in office the conservative Supreme Court would backtrack instantly and claw their power back.
Supreme Court gave POTUS the power to use seal team 6 to assassinate his political rivals. SCOTUS doesn't have the power to claw back their power.
Why are you assuming the next democratic president (or really any president not called Trump) will have this power?
Because the myth is gone. Presidents have always been restrained by their own willingness not to abuse their power. This willingness was based on two beliefs that Trump has proven mistaken over the last 10 years:
1) Congress will come together to impeach and remove a rogue president, even if he is from their party. This is not true anymore, the impeachment clause is inoperable due to party polarization.
2) The President is liable for any crimes committed in office after he leaves. Merrick Garland proved this wrong after he failed to prosecute Trump for the crime of fomenting insurrection, and then SCOTUS gave Trump and all future presidents an almost impossible shield for future prosecutors to overcome in the form of "presidential immunity".
So unless something changes, the next and all future presidents will have carte blanche to wield the DOJ and FBI to attack his personal political rivals. He can impound and reallocate any Congressionally allocated funds toward implementing his ideological goals, and he can defund any programs he doesn't personally like. He can withhold funding and clearances for companies, lawfirms, and universities unless they implement his agenda. He can send the US army into US states to enforce his agenda. He can withhold disaster relief from areas he deems not politically loyal enough. He can take huge equity stakes of companies he deems nationally critical.
These are all powers POTUS has now, and they will remain powers POTUS until he's prevented from using them.
Again, you are assuming that Congress and SCOTUS will stay consistent in their behavior when there's a new President. The exact same Senate and House that exists today will impeach the next Democratic President in seconds should he/she repeat 1% of what Trump has done since taking office. And every executive action of theirs will be blocked by the Supreme Court in a 6-3 vote.
I think you should expand your line of thought. Think like MAGA in this situation. If you are a Democratic politician with no scruples and a drive to implement your agenda, what could you do? Assume for the sake of argument that you were swept into office on a tide of anti-Trump backlash and you have a majority in Congress.
You could start by passing legislation and excluding it from judicial review under Article III. After all, as you say, the SCOTUS would otherwise vote along their own ideological lines against everything you want to do. Sure, SCOTUS and others will undoubtedly howl that Marbury gives the court the right to judicial review, but you would not be the first president to ask the court "with what army?"
We are at a crossroads. Will the Democratic Party see itself as responsible for conserving the republic and push the government back towards something boring and sane? Can such a party actually get elected today? I have this suspicion that a lot of people think so, especially MAGA -- they [mostly] cannot conceive that the opposition can turn the tables and use identical tactics on them, so they feel like the current situation is a temporary but crucial win only for them, which will move the Overton window to the right. But what if there is really a sea of anger boiling below the surface right now just waiting to be tapped by a Democratic demagogue?
Could get exciting.
I don't think so, I think I'm accounting for the recent shift in realpolitik. Why would future Democrats impeach their own POTUS for using the DOJ and FBI to arrest their political enemies?
The Democratic party as you knew it is dead; it died in 2024, just as the Republican party as your knew it died in 2020. The Republican party has been reformed into the MAGA party, which bears no resemblance to the neocon Republicans of the 2000s. Just the same, the Democratic party will reform but they will not resemble the party of Clinton/Obama/Biden/Pelosi/Schumer. They are done as a political force.
Moreover, why wouldn't a future POTUS start off by arresting the current conservative SCOTUS judges? Decide on the arrest, make up a pretext, if US attorneys don't comply just fire them until you find one that does, like what they're doing to Comey right now. Make some vacancies and then appoint his own court. Or, just ignore them entirely, there are no consequences for not following their orders.
Is there somewhere I can determine if a particular business is majority held by a PE firm?
I would really hope for this to be a thing. I have high suspicion of which ones are due to degradation of quality...but if I'm going to switch to another provide I'd like to know before hand if they are PE or not.
Search press releases, you fill find announcements of PE deals.
any way to get data for it? publicly is it possible?
I would have liked more insight into the control group (so called "matched control") hospitals. Typically, PE firms only step in when companies (in this case, hospitals) are struggling. If the PE hospitals were in dire financial straits pre-acquisition, these results don't seem too surprising.
Ideally, the control would be a set of hospitals that PE firms otherwise wanted to acquire but were blocked for reasons unrelated to financials & performance of that hospital, e.g. regulatory. Granted, I expect that might be quite rare.
To be clear, I think private equity firms have had quantifiable negative impacts in many other aspects of healthcare. For example, acquiring helicopter-rescue/air-ambulance companies and sending them out for non-emergency situations.
People assume staff shortages, but I've been to a cheap non-profit hospital and everyone was very green and TERRIBLE at their jobs due to lack of training.
After PE took over regional and rural hospitals, they removed specialties so patients have to be transported to larger hospitals. And guess what else they bought up? Air ambulance services. Flights are up 900% and profits are up too. This undoubtedly increased unnecessary and preventable death and suffering in the name of profiteering. Some things should never be allowed to be under-regulated for-profit cash grabs.
This could be the biggest bipartisan rallying cry around which politicians and elected officials could cheer on improvements.
But I suspect that won't happen.
There are no big players in our current political system with the will to impose new regulations on finance.
Ownership by profit focused organizations result in worse service? Who would have imagined!
How in the world are private equity groups allowed to own hospitals? One of the largest hospital orgs in the US is a non-profit and so were most in my old state (non-profits on paper at least) so it's surprising to know hospitals can be for profit
I've instinctively been avoiding hospitals run by PE, and now I have a good reason to.
I'll never forget with my first kid they tried to scare us into genetic testing - I mean, they had a pamphlet and video they were required to show us that were meant to scare us into it, but I could tell from the doctors face that she wasn't into it and felt like she was apologizing when she said she had to play this video and leave the room. We switched to a different hospital almost immediately.
Here is a thought experiment, especially for people with pensions (unlikely on the HN comments board). PE's are being funded by pension funds. So, as a pensioner, maybe you get a slightly better return. However, the services you will need as a pensioner (hospital and nursing home care) are significantly degraded by private equity. Would it not be better if pension funds pulled out of PE entirely?
The argument here needs to be a societal one because everyone will assume that they'll be going to the hospital that isn't affected by it
I liked Tulsi Gabbard's "two-tier" proposal for healthcare reform back in 2020. Grant state or federal government full control over emergency care and only the most expensive and obscure cancer treatments all of which act economically as a natural monopoly. Then for every other segment of healthcare where competition can exist, keep them as private markets but greatly enhance antitrust enforcement.
The only thing missing in all the good talk about healthcare is what to do about health insurance, which is the middleman that drives up prices. I propose making all forms of price discrimination illegal in healthcare, i.e. uninsured and HSA patients cannot be charged more than health insurance companies.
I also propose standardizing healthcare into 5 different health plan contracts, then requiring all health insurance companies to make all of their health plans fit into one of those contracts with zero modification to the terms and conditions. This will make litigation faster and easier, and it will avoid fraud disguised as "fine print".
Then, finally I propose requiring all health insurance companies to pay for the services up front and then sue the patient to get the money back, reversing the existing pattern where the burden of proof falls on the patient and the patient has to wait until the insurance provider relents. Think of it like a patient suing an insurance company and getting an injunction to pay out the claim while the legal ruling is pending, but faster.
The entrenched interests would fight tooth and nail against this but I think that the drive towards simplifying billing and pricing is a generally good thing.
That being said, in my view, one of the fundamental problems with healthcare is that outside of truly elective procedures like cosmetic plastic surgery and lasik, it's nearly impossible to have free market economics function.
- There are HUGE information asymmetries between doctors and patients - Judging performance of doctors is very challenge. Reviews are terribly inaccurate, data can be better but has big problems, and even other doctors aren't good judges of doctors outside their specialty. - Right now at least, price discovery is nonexistent so you can't price shop and compete on price vs quality - Insurance means that consumers of healthcare are not actually footing the bill so they have no incentive to price shop. And most healthcare procedures are completely unaffordable so there's no way we can do without insurance - and finally it's really hard to make an economic decision that is literally life and death. Am I going to forgo a $100k surgery if it means I'll die? There's no choice there
All of these things lead me to the conclusion that healthcare is fundamentally incompatible with classic free market economics, and some form of single payer is the only solution to avoid us bankrupting our country spending on healthcare
> I propose making all forms of price discrimination illegal in healthcare, i.e. uninsured and HSA patients cannot be charged more than health insurance companies.
As long as it's left generic so it goes both ways. Currently it's usually the uninsured patients who are charged less (since they're paying the whole thing out of pocket instead of having insurance cover most or all of it), not the insured patients.
I'm not comparing the bill uninsured patients pay to the bill insured patients pay. I'm comparing the bill hospitals charge uninsured patients to the bill hospitals charge insurance companies for insured patients.
Hospitals and clinics offer a preferential rate to insurance companies as a sort of volume discount because insurance companies with thousands of patients have a lot more negotiating power than any individual patient who is uninsured or using an HSA.
It got even worse once health insurance companies started negotiating contracts with favored nations clauses requiring hospitals to bill then ~10-30% less than patients paying out of pocket. It's an oligopoly, but on the demand side: an oligopsony.
>Beneficiaries in EDs of private equity hospitals experienced 7.0 additional deaths per 10 000 visits after acquisition relative to control (13.4% increase from a raw baseline of 52.4 deaths per 10 000; P = 0.009).
In other words, an increase of 0.00055 deaths per visit.
>Limitation: >Potential unmeasured confounding; lack of generalizability to other acquisitions or patient populations.
I desperately wish to stop the flow of bad news into my brain. I've deleted every social app, but it always finds me...
Block all news sites? I Just did that, it does help! I like HN because it’s pure text and the community is good. At least here people disagree and try to use some evidence or logic and engage with each other.
I was thinking I could buy an hour or so of time in my day cutting this all out, surely then I’d be shredding music practice way more… so hard to get down to it after work and kids.
Looking at death rates in isolation paints a misleading picture, like accounting only for costs and ignoring revenue. Net profit is the measure of overall value to the economy, and whatever maximizes profit is by definition the greatest good for the greatest (i.e., best, if not most numerous) people.
I hear net profits were pretty good under slavery
is the change in death rate because the health services got worse or because the type of patients going to that hospital have shifted?
if they slash staffing and make it hard to schedule in a reasonable amount of time, patients with low-risk issues will just skip going altogether. Or, if they have the means, go to a nicer hospital.
This kind of thing makes Galen and Hippocrates sad as they watch down from physician heaven.
https://en.wikipedia.org/wiki/Galen
But i'm sure shareholder value saw some much healthier returns, so it all sort of balances out nicely.
I wonder what if the shareholder happens to be in ER?
They will get a tax write off for their medical bills via their companies expenses ?
Tax line item comment: "Work trip!"
That's a price they're willing to pay.
The market really is the greatest mechanism for laundering morally reprehensible processes, isn't it? I find that many people struggle to find the vocabulary or concepts to denounce this kind of outcome because it occurs through market forces.
When it's public health care given to everyone equally: Death Panels
When it's private healthcare given to those who can afford it: Efficiency
I’d rather these hard decisions be made by public officials. It’s more ethical to make treatment of the sick and elderly a public affair and not a for profit industry.
Totally agreed; I'm pointing out the ridiculous framing of the issue.
Yeah if instead of "PE" you had to say "I take out a massive loan to buy a business collateralized against itself, saddle the business with the debt, take money out of the company to pay myself, and then ruthlessly cut quality in the business to make short term profits look higher to resell the business (and the bank is happy to finance this because they get paid first if the business goes bankrupt)" it feels like it would be a lot harder to come across as legitimate
Late stage capitalism?
That term is more a reference to globalism, consumerism, multinationals, wealth inequality, etc. It's been overused by the public to mean "anything I don't like that has some tentative link to capitalism"
Surely a component of late stage capitalism is the accumulation of wealth leading to anti-competitive practices, in this case resulting in degradation of quality of service. Health care in the US isn’t a competitive business therefore it’s rife for anti-consumer, profit-maximizing change.
But you can have all those things without late-stage capitalism - and private equity predates late-stage capitalism. So saying "it's because of late-stage capitalism" is like saying "it's because of democracy". The private equity is happening within a democracy and late-stage capitalist system, but these are correlations, not causations.
Ah I see your point
There are a significant number of people in this country that will view this as the market enforcing rational healthcare (at least until it affects a loved one). I’m not sure we have the will to improve our care.
> at least until it affects a loved one
This lack of empathy extends to many other areas: Drug addiction, homelessness, rights for marginalized groups, etc. So long as there is a profit motive, these things will suffer due to the selfishness of those who don't (yet) receive a benefit.
Concur. Lack of empathy is the curse of our age and the destruction of our society.
Emergency room care is definitely not a rational market. Hospitals have a federal obligation to provide stabilizing care regardless of ability to pay. That's not really a market.
I wonder how this study controlled for hospital selection though. In locations with multiple hospitals available, ambulances route patients on multiple factors... Perhaps there are factors leading to these hospitals receiving patients less likely to survive.
Additionally, PE often purchases distressed companies, so the likely alternative to a PE purchase of a hospital is a closed hospital. In some cases, closing the hospital would be better, but probably not all of them.
There's lots of ways that market forces that should normally work don't. For instance:
* the amount billed to individuals is often wildly different than the bill an insurance agency would negotiate with a provider. (I'm not an expert, there may be more layers of indirection there; this is simply my mildly-educated impression.)
* Depending on the sort of care you seek, a provider may have a de-facto monopoly in the area.
* There's no obligation (or indeed incentive) to be up-front about costs—we've all had the experience where we were charged for a service that wasn't even presented as a clear option, let alone one that would cost money, let alone anything approaching a reasonable charge for the service rendered.
* When you need care the most is often when you're least able or inclined to play providers against each other/shop around.
* Deductibles are so high we're essentially pitting high regular premiums against worst-case scenarios, which is deviously difficult to reason about, even for actuarial experts.
...etc etc. It's not easy to proactively think through costs in the world of American healthcare even as a cost-conscious, pessimistic actor. And on top of all this, the sheer bureaucracy necessary to manage negotiating payments and insurance coding adds a significant amount of overhead (inefficiency) to the provider's end bill and to your premiums—how on earth can you audit a provider's or insurer's efficiency? It's all opaque, and most of us don't want to think about it at all.
We both have the will to improve care and a lack of understanding of the true nature of the finance industry. People don't understand what PE is so they assume it is some kind of business people legitimately trying to run a business
Thats not how private equity works.
You're going to have to articulate yourself with particulars if you want me to understand what you're talking about. For instance, I didn't mention private equity at all, so I'm confused why you might think I was attempting to refer to them.
It should be against the law for private equity to own hospitals.
Isn't it obvious that a private equity firm will focus on profit and let people die?
Public healthcare is the only way to go. This has been proven multiple times in so many countries.
Perhaps a hot take (to some at least): the invisible hand works. Supply demand, it works [1]. Unfortunately, that also means that your life can be priced out of the market. If one finds that important, then it doesn't work.
Profit motives don't care about humans, it cares about profit. If it has to care about humans because of it, then so be it.
We've never been individualists. We need infrastructure, thus some form of collective action. Without roads, no freedom to comfortably drive a car, without the internet no freedom to comfortably search for information, without healthcare no freedom to comfortably stay healthy when a medical emergency occurs.
Could you imagine if all roads were a for profit road? Could you imagine if TCP/IP was for profit? Well, I think some of you could, as some of you know failed attempts of protocols for money at that deep of a level. I'm curious about the stories.
In any case, that's what's happening here with medical institutions that should have an infrastructure role.
[1] Well, to be fair, there are many caveats, but let's not go into oligopolies, cartel-like formations, etc.
PE seems to have a Sadim touch.
Everything they touch, turns to shit.
However, they squeeze a lot of money from the coprolites, and that’s enough to buy regulatory capture, I guess.
Here's a list of all the surprised people in JSON format:
[]
>>"We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness"
The institutions supporting three things, Health Care (Life), Prisons and Justice (Liberty), and Education (Pursuit of Happiness), should never be run for a profit if a society wants to be equitable and prosperous.
Capitalism and profit motive are great for some things in a society, but are also counterproductive at many others. Use the right tool or system for the right job.
Unchecked capitalism may create a couple of wonder drugs costing millions, for a few people, and enrich the 0.1%. On the average it will kill more people, make more people bankrupt and kill the economy.
Anyone with access to the study know how they matched patient populations at the comparison hospitals?
Why does this sound like a Boeing 2.0? Hand over to the sharks and you see incidents go up
Sure, deaths increased by 13%, but think of all the shareholder value that was created.
This certainly reflects my experience with private equity in general. It seems private equity by definition does not care if you die in any form direct or indirect. IMO its one of the greatest evils going on that literally nothing is being done about.
Last year I went to an interview where they flat out admitted to me that the private equity that bought them fired the entire previous team because they "believed" it could be done with far less people (4 vs 25). I asked them who has been maintaining things since that happened and they told me they have been hiring contractors to get through the period but "they haven't really been doing the job". I guess at least they were honest with me so I could nope out of there ASAP.
And if someone shoots another health exec.. well, I hear some gun deaths are worth it in order to have Second Amendment.
Seems like a perverse incentive.
Did anybody really expect any other possible outcome? Humans have an astonishing ability to put their self-interest before others. Even if it money vs a life.
That said... How much is a day, a month, or a year of a human life worth? Since it's clearly not infinite, there must be some line where saving a life is too expensive. What is that line?
Of course I have no answer here, but I think this ethical dilemma is what it boils down to. Still terrible. :(
wow, is there anything private equity can't increase!?!
Yeah, charity.
Is anyone surprised?
History will be hard pressed to find a success story after private equity takes anything over. Here I was thinking I had coined a term for them, only to find out it already exists... "HYENA CAPITALISM".
Hyenas typically eat carcasses. Similarly it seems PE usually buys already distressed businesses. Is the problem the PE or are they making the best from what's left of a dead business? I genuinely don't know.
Anecdotally, here in Portland metro everyone is upset about a PE firm that's ruining several beloved local restaurant chains. They bought them up during the pandemic and now many of them are closing. The local Reddit is hating on the PE firm. I suspect these restaurants would have closed during the pandemic if it hadn't been for the acquisition. They then failed anyways because certain parts of our metro area didn't recover well. I don't have access to their books. So I'm just speculating but this seems highly likely to me.
Same shit has been happening the pet care industry.
The rich don’t care about anyone but their financial advisor.
i'd be curious about other metrics in addition to death rate...
- health adjusted quality of life metrics and the way they are impacted by various diagnoses
- healthspan metrics
- patient satisfaction
- employee satisfaction
Ultimately, capitalism is not necessarily at odds with providing efficient high qualty healthcare. But we have to decide what matters. If death rate were the only relevant metric, medicine would be practiced much differently.
There's a reason death rates are used to measure outcomes in things like crime prevention: it's harder to fudge reporting when there's a dead body.
Everything else you mentioned can be manipulated in bad faith, especially by a profit-motivated organization.
I agree, I don't think capitalism is inherently at odds with quality healthcare, and technically private equity isn't either but it certainly raises the chances. PE firms tend to be fairly parasitic with their investments - maybe that's fine for a restaurant chain but that sucks when you're dealing with lives (people or animals). I used to be in health insurance and you knew when there were nursing homes and clinics/faciltiies that were owned by PE. PE-owned nursing homes tend to have far more infractions against them, more elder abuse claims, and lower quality of life for the residents. You could say well PE buys up facilities that have room for improvement, which sometimes that's true, but in many times they seem to buy because (imo) they feel they can get by with lower regulatory enforcement so can cut costs and squeeze them. Sometimes they do buy or build higher-end senior living facilities but those are cash cows in their own way that you don't want to cut corners with.
Your thesis in defense for-profit healthcare is that PE and capitalism are not the same thing, and are not 'at odds' with quality care?
You are asserting that these excess deaths and real harms due to these takeovers are not natural and expected consequences?
What is the secret third thing that makes these otherwise compatible systems 'at odds' with human life?
This take is also a little funny because people do often conflate "capitalism" and e.g. "markets", which certainly don't rely on capitalism. But "private equity" is about as tightly-bound to the concept of capitalism as you can imagine.
> Ultimately, capitalism is not necessarily at odds with providing efficient high qualty healthcare.
What would the situation look like where revenue is better directed to shareholders than to care?
> Ultimately, capitalism is not necessarily at odds with providing efficient high quality healthcare.
Um, yes it is?
First off, there is tension between "efficient" and "high quality". High quality in an environment with peaky demand requires over-resourcing during periods of lower demand, which is inefficient. The best way to resource for peaky demand curves is to run at 60-80% usage (i.e. 20-40% idle).
Health care has peaky demand curves. PE is going to optimize on efficiency therefore degrading peak demand performance, which is when quality matters the most.
Second, capitalism optimizes resources to maximize value capture. That's great when value capture is tied closely to value delivery, like you want a hamburger and you get a hamburger.
Not when value capture is diffusely tied to value delivery. You want a stable market economy with rule of law to protect your property and your contracts. While without this, nothing you own has any worth (making it the most valuable thing possible), the value of this is rarely delivered to you in discrete chunks.
How can capitalism create things like my macbook m3 that are very high quality, but you don't think it can create a very high quality healthcare business?
Why doesn't everyone have a macbook like mine? Because society hasn't decided to subsidize them. But that doesn't mean the macbook isn't high quality.
Capitalism's incentives alone are not sufficient to provide healthcare in a way that most people think is reasonable and fair for all members of society. But that doesn't mean that it can't be useful in allocating capital in ways that are very beneficial to society.
The purpose of regulation can be to create incentives where capitalist participants profit goals align with society's notion of what is best for everyone.
The problem as usual is that some people think that researchers who create new medicines should not be motivated by profits, or that doctors are taking too much money, etc. Any dimension that we regulate will result in pressures on other parts of the system. In my view, government is often not good at creating socially optimal regulations because interest groups get involved and create regulatory capture.
Should surgeons really earn $900K and the top student in a top med school class has a 50% chance of even getting the chance to train in that subspecialty? Do the outcomes really justify such an excessive focus on quality? Should we all expect our insurance to cover 2025 pharma options when 2010 options might cost half as much?
The "optimizations" we have at this point are far from optimal, and any serious analysis needs to look at many different measures of quality or it doesn't make sense. Much medical care has virtually no impact on longevity, does that mean it is useless? I'm not advocating for private equity at all, just saying that it is the regulatory environment that creates those "market opportunities" for PE firms, not something about capitalism. As we've seen with Trump and the support his base has for his whimsical tariffs, people put way too much faith in government's ability to optimize things.
What are you faffing on about? With no barriers, pure capitalism would consolidate healthcare into a full vertical and horizontal monopoly. This is basically what PE firms are doing, but indirectly.
Capital doesn't organize around any secondary metric but profit without being forced.
Employee satisfaction? Are you completely out of touch? Speak to any working professional in a PE owned hospital system. It's horrid, the worst, dystopian, soul diminishing.
Satisfaction only matters if there are other places you can go.
Patient satisfaction? It's already 'accept what we give you, pay what we demand, or you die' in rural areas or if you are poor/uninsured. People already avoid going to the doctor when they should because of this. What bizarre alternate world are you living in?
Capitalism's gonna capitalism.
fucking duh