The graph of epipen pricing over time at the bottom of the article is jaw dropping. "Did we get in trouble yet? No? Add another 10% then".
Only imaginary books on Amazon have price curves like that.
> The graph of epipen pricing over time at the bottom of the article is jaw dropping. "Did we get in trouble yet? No? Add another 10% then". Only imaginary books on Amazon have price curves like that.
Looks perfectly reasonable to me. Captive market, zero competition, reasonably fixed demand, and (best of all) disconnect between the person making the purchasing decisions and the one actually footing the bill.
This is the healthcare system our elected representatives have created for us. Either embrace it (which I guess means investing in an overweight portfolio of pharma companies) or send them a message to correct the core of the problem.
Its a media show... The drug in question only applies to 3000 people, has no patent on it (anyone can manufacture it), is currently the lowest price in its category, costs $20 if you have insurance, is free if you have no insurance.
They are talking about impoverished women with AIDS in Africa - and the drug company only has a license for the US, the drug itself has nothing to do with AIDS, and is free for half the patients and a $20 co-pay for the other half.
This is what Shkreli has counted on you believing. The cost is NOT $20. The co-pay is. The amount paid by your insurer is well into the four digits.
Your insurer isn't an endowment, it isn't a charity. Notwithstanding a few percent ROI on investing premiums, the only person paying these four digits is you. Or your employer. It's just amortized and spread among a group.
"It's not that bad, it's really only $20" is the big trick here. A much higher amount is being billed, and paid, even after negotiation. It's not coming from a magic money fairy.
No, this is not an 'ideal' market. Mylan was able to exert significant control over the demand by getting recommendations changed (you now need two EpiPens, rather than one), and getting EpiPens required in many schools, etc.
I can't imagine anyone recommending having less than two pens: what if one fails due to a manufacturing flaw, user error (e.g. it would suck to fumble it in the heat of action and drop it in an unacceptable location), etc.? And isn't a second dose sometimes needed?
I don't know the details, but I do know my sister always carried two for her eldest (past tense because he's now in college and presumably carrying them himself now).
And state legislation mandating that medic units carry multiple EpiPens.
Medic units, that have trained personnel, that have all the equipment to draw up Epi from a $3 vial themselves, who are already on scene.
This leads to my county alone having to throw away $130,000/yr of EpiPens that don't get used before they expire. Because the state legislates that we're required to carry them.
"The company is in the hot seat and it is a bit convenient that CMS decides after 19 years that Mylan has been wrong all along while it did nothing about it, just in time to suit Congress’ needs."
This product has been classified as a non-innovator product for the last 19 years and CMS is just getting around to it? Sure.
And whenever someone says the US gov't doesn't negotiate down drug prices, take a 2nd look at the Medicaid rebate. This is how those negotiations went....
CMS: Oh that's your price? We're going to go ahead and give ourselves a 13% discount (it's 23% for most drugs).
CMS (Center for Medicare and Medicaid Services) is not a purchaser, they are just a payer. For example, a pharmacy will fill your Rx, then go to CMS (if you're on Medicaid) to ask them to pay it. Most drug companies use a distributor, but that doesn't impact how they interact with CMS.
To answer your question if they are required to "sell" to CMS, the basic answer is yes. In order to sell your drugs to Medicaid and Medicare patients, CMS requires a "Pharmaceutical Pricing Agreement" (PPA) to be signed. One part of that agreement is that you give a significant discount to CMS for certain patients. This is why I chuckle when people say "Medicare can't negotiate drug prices", which is true, but the gov't takes their pound of flesh other ways (Medicaid rebate, 340B rebate, which both have price increase penalties). There are examples of drugs where the manufacturer is required to sell them at "penny pricing". That is, $0.01 per unit of drug. This is usually due to the manufacturer cranking up the price really fast, but in the end they have to give the drug to the gov't for FREE.
Do companies have to enter in to a PPA? They don't have to, but since Medicaid and Medicare represent more than half of all patients in the US, you'd be stupid not to. There is one example where a drug company said "no thanks". It was J&J's over the counter division. I assume Medicare and Medicaid was a super small slice for that business so they just pulled out all together. Most companies can't afford to do that.
> This is usually due to the manufacturer cranking up the price really fast, but in the end they have to give the drug to the gov't for FREE
To add to what you're saying, this same effect also results in inflated prices for patients on private insurance and patients who are uninsured. When Medicare reimburses less than the direct cost of goods and services (which they do, in the aggregate), then providers have to make up the difference elsewhere.
That's why you see incredibly inflated bills for basic services. It's because private insurers and uninsured patients are in effect subsidizing Medicare through higher reimbursement rates, which get passed on to patients as higher out-of-pocket bills or higher premiums.
You're also missing the frequent abuse of the ER by medicaid members, the number of patients that go to the ER for a cold and waste everyone's time and money is way too high.
> Is anyone required to sell to CMS? Why can't they just say we won't sell it to you. Please go through our distributors.
No but the Medicare/Medicaid market is huge and they tend to pay their share on time and without hassle. Companies put up with the pricing nonsense because they net out on top.
>the Medicare/Medicaid market is huge and they tend to pay their share on time and without hassle. Companies put up with the pricing nonsense because they net out on top
This is certainly not true for providers (ie, hospitals and doctors). Medicare is notoriously painful with billing and reimbursements.
In addition, they don't come out ahead. In fact, Medicare reimburses about 7% less than COGS, which means providers are already losing money per patient before they have to think about covering their overhead.
The reason they accept Medicare is because it's very difficult, legally, not to. Despite this, Medicare has gotten so costly for them that many hospitals have recently started talking about finding a proper legal path to dropping Medicare altogether.
> I'd find it hard to believe that doctor's are forced to accept patients with Medicare or Medicaid.
It's easier in private practice, but private practices are a dying breed - most doctors these days are employed. But hospitals are hard-pressed to do the same.
For an example, if you're a hospital and you have an an emergency room, you cannot refuse emergency care for a patient. That emergency care may or may not also result in an admission to the hospital, and that's a decision you can't make preferentially based on the insurance status of a patient (by law).
You can refuse to accept Medicare, in which case Medicare won't reimburse you, but that means that you're providing emergency care to 40% of the population for free[0]. So refusing service to Medicare patients means, among other things, not running an emergency room.
(Incidentally, some hospitals have done exactly this - either shutting down their emergency rooms entirely, or switching to freestanding ERs, which are (ironically) prohibited by law from accepting Medicare).
[0] Technically they bill the patients for this, but from a hospital's perspective, this is "for free" - they don't expect to collect on most bills they issue to self-paying patients for emergency services, which is why they're so quick to negotiate them down if you ask. They know self-paying patients are very unlikely to actually pay the full bill, so they'd rather discount it up-front than write it down.
"they don't expect to collect on most bills they issue to self-paying patients for emergency services, which is why they're so quick to negotiate them down if you ask. They know self-paying patients are very unlikely to actually pay the full bill, so they'd rather discount it up-front than write it down."
... or send it to Collections, charge it off, pick up the check for what might likely have been the negotiated amount anyway, take the difference in a tax write off, and debtor gets chased for the full Chargemaster rate...
If you think that's nuts, you should look at Medicare Part D:
By the design of the program, the federal government is not permitted to negotiate prices of drugs with the drug companies, as federal agencies do in other programs. The Department of Veterans Affairs, which is allowed to negotiate drug prices and establish a formulary, has been estimated to pay between 40%[27] and 58%[28] less for drugs, on average, than Medicare Part D.
Although generic versions of [frequently prescribed to the elderly] drugs are now available, plans offered by three of the five [exemplar Medicare Part D] insurers currently exclude some or all of these drugs from their formularies.…Further, prices for the generic versions are not substantially lower than their brand-name equivalents. The lowest price for simvastatin (generic Zocor) 20 mg is 706 percent more expensive than the VA price for brand-name Zocor. The lowest price for sertraline HCl (generic Zoloft) is 47 percent more expensive than the VA price for brand-name Zoloft."
— Families USA 2007 "No Bargain: Medicare Drug Plans Deliver High Prices"
Estimating how much money could be saved if Medicare had been allowed to negotiate drug prices, economist Dean Baker gives a "most conservative high-cost scenario" of $332 billion between 2006 and 2013 (approximately $50 billion a year). Economist Joseph Stiglitz in his book entitled The Price of Inequality estimated a "middle-cost scenario" of $563 billion in savings "for the same budget window".[29]:48
Former Congressman Billy Tauzin, R–La., who steered the bill through the House, retired soon after and took a $2 million a year job as president of Pharmaceutical Research and Manufacturers of America (PhRMA), the main industry lobbying group. Medicare boss Thomas Scully, who threatened to fire Medicare Chief Actuary Richard Foster if he reported how much the bill would actually cost, was negotiating for a new job as a pharmaceutical lobbyist as the bill was working through Congress.[30][31] A total of 14 congressional aides quit their jobs to work for the drug and medical lobbies immediately after the bill's passage.[32]
By the design of the program, the federal government is not permitted to negotiate prices of drugs with the drug companies
Yes, but Medicare Part D is not run by the federal gov't, it's run by private insurers (the gov't just pays them). Private Part D plans negotiate down the cost of drugs all the time. In fact, the actual costs of Part D have consistently come in lower than projected since the start of the program.
Private Part D plans get lump sum payments from the gov't to pay for patients. Each Part D plan bids on being a provider. So, when the Part D plan negotiates a lower price on a drug, they can bid lower for their overall plan and the savings get passed onto the gov't.
And it's not fair to compare Medicare Part D prices to what the VA pays. The VA is a pretty small slice of the market and there is statutory language about the discounts they must receive. A lot of it isn't even negotiated.
And finally, Medicare couldn't negotiate lower prices if it wanted to. Right now, Medicare Part D has a hell of a time excluding a drug from their formulary. They basically can't say "no, patients can't use this drug". If they can't say no, then what leverage do they have over drug companies? The rules on how Medicare can manage their formulary would have to change before they could start negotiating.
And don't forget that us Medicare Part D "customers" or whatever you want to call us have more than a little skin in the game, especially the ones who'll enter the "donut hole".
I'd add that the government "choosing a plan" web site is rather good, give it a list of drugs and it'll tell you what you'll pay next year, modulo changes. It's also not difficult to manipulate it to play what if games, e.g. every once in a while I get a sinus infection, and it takes 30 days of a not so cheap generic antibiotic to be sure to cure it. So I put that drug on and off my list, to make sure it'll be acceptably priced if I have bad luck next year. Displays quality survey data that seems to have some relation to reality, makes enrolling in a new plan a snap, etc. etc.
Are there reliable estimates on how much lobbying money is being spent, including retirement positions for congressmen? How much of congress could a philantropic billionaire like Warren Buffett buy?
I'm torn on this subject, could someone explain to my why this is morally wrong? (honest question, equally torn on the Shkreli case). I don't have any knowledge of US medical policy, law and regulations but does the fault not lie squarely with government here? Surely one can not expect a commercial enterprise to price a product as 'fair' (whatever that means) when it is operating in a competitive environment? (I wouldn't have the heart to run such a company but isn't this to be expected?).
There are soccer players here in the UK that get paid £100k per week to do nothing- noone is up in arms to regulate that market?
> There are soccer players here in the UK that get paid £100k per week to do nothing- noone is up in arms to regulate that market?
Those players aren't being made possible by the patent system and medical regulatory agencies though. If you can play soccer better than them you can go take their position, but if you make a cheaper EpiPen you won't be able to compete. (Though that may be changing, the FDA seems ready to fast track some competitors.)
I agree my comment was a silly attempt to illustrate that a free market will set a price that may be considered 'unfair' in some cases. However the EpiPen market seems to be far from free.
This would be my gut reaction too, reading about this in more detail has made me think the issue is more subtle than that. My point is, if you don't regulate a market, can you expect a market to regulate itself?
If you have to be forced in order to act moral, you're immoral. People can call corporations "amoral" all day long, but they're made of people, and their decision to not be moral also implies the decision to be immoral.
No market will ever regulate itself when the product is life or death. People will always choose life at any price. This is why most civilized countries provide health care for everybody.
That is the ideal world of some people, the invisible hand of the market regulating it blah blah. However there's never been a single instance where this has actually happened, markets have to be regulated by an outside power (namely, governments).
EDIT 1: Apologies @pikzen. Edited to agree with you :). I should read more carefully on a Friday morning. EDIT 2: And you :).
I agree, there are plenty of examples where regulation works. The National Health Service in the UK is a shining example of this (it has its own issues but what can you expect when you are running one of the largest organisations in the world?). There are succesful regulations that reward companies (such as with subsidies and other indirect incentives) to choose the 'morally correct' option (this is done for example in the EU to limit environmental impact of industry).
Because Congress deliberately passed bills that prevented the government from bargaining with pharmaceutical companies, because those same companies pay into re-election campaigns.
If anything needs regulation, it's campaign finance.
US healthcare is natural local monopoly. There is no price transparency for medical treatments. Even surgeons don't know what the patient will be billed.
Plus most patients are not qualified to make medical decisions about whether a procedure is correct.
> Even surgeons don't know what the patient will be billed.
Well, there's a couple reasons for this beyond "Well, fuck even trying to be transparent."
1.) Many physicians, nurses, etc. aren't employed directly by a hospital, but instead come in under contract as part of a physician group. Hospitals charge their own fees for use of their facilities, which are completely opaque from the physicians working there in this case, every specialty contracted by a different group handles their own billing as well - this makes it incredibly challenging to try to even get an estimate when everyone is working on their own.
2.) Medical care is more like visiting a mechanic to fix your car than it is just buying a service. Even if you could try to get a reasonable quote, complications come up, part of an encounter for "I am feeling sick" is diagnosing you in the first place which can have a lot of variety in just how much is done based on the symptoms. I can say it's gonna cost $120 for you to come into an urgent care and see a doctor, but depending on what happens it could very well cost more.
3.) Billing is separate from everything else in most cases. In the first point I mentioned I work for a billing company owned by a physician group, notice the "owned by". We aren't part of our parent company in the day-to-day, in fact we collect our own revenue and the amount of money flowing between us is very one-directional (we take our billing fee and the rest goes straight to them) - the same goes with many other aspects of our operations, there is cooperation but we're still on very different sides of the fence. With that said, our providers have very little to no insight into what we actually do, they just know we code the encounters and send out claims then collect money - some may have an idea what `R10.9` means, but most don't, or which of the ED visit codes (99281-99285) are appropriate. All of this work that goes into coding an encounter is because that is what insurance companies base their allowable charges off, and it's our job to make sure it's coded appropriately so we get appropriate compensation for the services rendered. WE handle all of this work, to the physicians it's just a black box - they treat the patient, they get paid.
If you want price transparency many things need to change in the industry.
Because I won't die if they're paying their players ten times market rates. They're merely entertainers. That's private money, mostly. Making a public service overpay by factors of almost 10 when it's quite literally a matter of life and death is morally wrong, yes.
Putting themselves in almost a situation of monopoly on epipens in the US (which you can't fault the high cost of entry for, I'm quite happy that medical devices have high standards) then yes, they should have a moral obligation to sell Epipens at a fair price.
They're not paying their players ten times market rates. They're paying their players 1x market rates. The market rate for those players happens to be very high. That's the whole point.
I admit my example of the soccer player is a bit silly (there are plenty of families that spend half their disposable income on following their favourite team in the UK so I don't think it is entirely beside the point).
I agree it is pretty grim if pricing of a medical device would literally cause death although I'm not sure that is the case.
> Putting themselves in almost a situation of monopoly on epipens
Monopolies are exactly why economic regulation exists.
it will be interesting to see how this is decided because apparently there is a generic epipen: 'adrenaclick' but pharmacists are not allowed to substitute the generic for epipen on a prescription. more details here: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
I am sorry, but as someone who isn't from the US (but does live and work in the US) ... phrases like this make zero sense:
> Mylan should have been paying a higher rebate of 23 percent, but did not do so because the company improperly classified EpiPen, despite being told its classification was incorrect.
If a regular person defaults on paying their taxes, the IRS can seize their property and stuff. Why are Mylan's EpiPen warehouses not being seized to pay for these rebates? Instead, they are being gently chided saying "you really should have paid more, because um, the law requires it?"
In my opinion, due to massive lobbying, there are really one set of rules in the US for regular people, and a different set for the ultra rich and large corporations. I would be delighted to be offered a working alternative explanation, or seeing massive financial and possibly criminal penalties for Mylan executives (if willful misclassification is proven).
That's not how it really works for regular people either. Virginia sent me a letter last year stating "we think you were required to file a 2012 Virginia return." Several months later they decide "we think you owe us X." No Department of Revenue agents seizing my assets. A few months later I had my CPA call, gave them my W2s showing I lived in New York at the time, and the revenue agent was like "our bad, you didn't owe us anything after all."
The government really doesn't go full bore after "you should have checked Box A instead of Box B" situations unless something really egregious happens, and that's true for little people too. When there is a big corp, involved in something like this, it's almost always true that there is ambiguity about which Box should've been checked. All these things get the blessing of some tax lawyer who doesn't want to go to jail.
Here there doesn't look like there has been an adjudication (a decision in a lawsuit proving Mylan owes something). Until then, it's just some official's statement.
The IRS can garnish your wages without getting a judgement first. That is just a fancy way of saying they can take your money without going to court. You'll have to sue them if you think it's being done incorrectly, right?
Why can't the same be true of Mylan? "Garnish" their profits; and if it was done wrongly, they can sue the relevant Government department.
I'm guessing there are issues of scale of bad behavior involved here, and perhaps wage garnishing is really true only for "egregious" cases. My point is that maybe large lobbying pharma companies making insane profit margins off up-marked drugs ought to an egregious case too.
That's actually the IRS having special standing (which it shouldn't, arguably). If it's a private contract, you'd have to go to court over breech of contract and probably end up settling.
That's true of the federal IRS. I guess it might be true of VA. It's not generally true of the states. My CPA applied my refund 2 years ago to the next year's taxes. IL passed a law saying you can't do that anymore, and quietly mailed me a check for the refund (which I wasn't looking for). When I didn't remit a tax payment the following year, they sent me directly to collections without notification, adding a 4-figure fee to my tax bill.
It's not like the laws you've cited were written by the same people for the same purposes, so there's no reason to be shocked that they are different in content and application. You'll have to find better examples if you want to stoke outrage.
How are they different in fundamental principle? Money is being collected from people (taxes) or corporations (Medicaid rebates) for a collective good.
> were [not] written by the same people for the same purposes...there's no reason to be shocked that they are different in content and application
This argument is circular in nature. "Different laws are different, because they are different". Why are they different? Could it have anything to do with the fact that Mylan spent several million dollars lobbying various lawmakers? (https://www.opensecrets.org/lobby/clientsum.php?id=D00002776...)
Because the lied to the government and misclassified the drug as a generic. By doing this, they can give out half the discount as with brand name drugs. Generics are discounted ~11% when sold to Medicaid, but brand name drugs are often discounted 20-30%.
Then just fine them, why does this have to be a criminal issue? It should only be a criminal issue when they did this knowingly and maliciously instead of checking the wrong box somewhere.
My economics professor had an ax to grind but he's right in that we don't live in a free market.
He gave the example of how the sheriff paid a gas station a visit when gas first reached a dollar. He said the gas station had two choices: sell at 99.9¢ or lower or shut down the gas station.
Actually the gas station was already selling at 99.9¢ because that pricing was already in effect from when one gas station owner sold it at 12.9¢ per gallon and everyone copied him since they were losing business.
It's really odd. The NHS in the UK does a reasonable job negotiating prices down and recommending generics. It's been recommending an alternative to the Epipen for a while now, I believe. So it shouldn't be intrinsic to state-run medical systems.
Yep - we've just been moved off EpiPen to one of the others (I forget which). Interesting is the network effect of EpiPen - many people have been trained to use them and are aware of there exact look and feel. For the new pens they are used in a similar but different way (I think the new ones are actually better/easier) but that might put some people off moving, where they do have a choice (not all doctors are being as strict with moving to the new version).
This means there are people who died who otherwise would not have. So weigh the loss of everything those people would have contributed to society and the economy over the increase in stock value.
Given how hamstrung regulators are these days thanks to a pro-corporate Congress, it doesn't say much other than that the government we've elected has chosen not to control costs.
Many people have strong support for a single payer system. Seeing this simple failure illustrates a risk in moving that direction. Who do you trust to do a better job keeping costs in control? The greed (or fiduciary duty) of an insurance company or the governance of bureaucrats?
I trust the market more because the government has proved to be far more corruptible. There should be a government option for sure, but regulations should focus more on making the healthcare market healthy.
* Open straightforward pricing
* Removal of trademark protections for named drugs
"I trust the market more because the government has proved to be far more corruptible."
Proved? Has the U.S. government actually been proven to be more corruptible than private industry?
I realize you might have been using a bit of overly-strong language, and not actually meant that in a literal way.
Still, frankly speaking, I trust the government a heck of a lot more than private businesses like Comcast or the health insurers.
Your statement, all the same, leaves me wondering if somehow I've missed out on some news stories or something, that shows how the government is corrupt while BCBS or UnitedHealth act with integrity.
There's no way to say "proved" about anything but mathematics that meets with it's usage in that context. It's not overly strong language, just used in a different context therefore with different meaning.
I trust an insurance company and healthcare provider because they are adversaries. Insurance vs insurance, insurance vs provider, provider vs provider. They're being driven with competition and ultimately greed. If one of them does a bad job, another that's doing better will replace it. They're all playing with their own money.
A government bureaucrat tough doesn't really have any skin in the game. They might be driven by good natured ideals, but I think that's far too vulnerable to compromise. From politicians being bought by lobbyists to a revolving door between industry and bureaucracies personal greed leads only to healthcare providers and government colluding for their own individual benefits to the detriment of the citizen who has no option but to pay taxes and get the services of the single healthcare system.
In theory a benevolent dictator is the ideal form of government, but in reality the people with power just aren't angels. You can use competition and greed for the greater good if you do it properly, you just have to recognize what you're doing and how to manipulate human behavior for the best outcome.
So, to clarify, when you say it's proven that government is more corruptible than business, you don't mean it's proven.
Look, knock government all you want, but unambiguous and strongly-phrased claims like that need something better than "this is so because I trust that this is so". Otherwise, we're just in truthiness territory.
"A government bureaucrat tough doesn't really have any skin in the game."
Neither does a contract specialist in an insurance company, of course. Both are just showing up for a job. Only one of them has a specific profit motive in mind, though. And it seems to be the exclusive domain of private industry to reward middle managers for short-term results, no matter what long-term problems those short-term gains create for the organization.
Man, the more we go over this, the more I trust the government to manage something as life-altering as health care. They're responsive to all citizens, we get to conduct regular changes of power, there's no profit motive, and we've got a wonderful model in a ton of other countries for how well it could work.
"In theory a benevolent dictator is the ideal form of government ..."
Whoa! What?? Where on earth did you get that? For someone who likes markets as much as you seem to, I'm really surprised you wouldn't endorse something that reflected, you know, the will of the people.
>I trust an insurance company and healthcare provider because they are adversaries. Insurance vs insurance, insurance vs provider, provider vs provider. They're being driven with competition and ultimately greed. If one of them does a bad job, another that's doing better will replace it. They're all playing with their own money.
I mean, alternatively, doesn't the ultimate utilization of what the market can bear mean "no aggression pacts" between companies? As far as I've observed change in local options and markets in recent years hasnt been from innovation or disruptive new comers in many healthcare fields but instead buyouts and mergers consolidating the power until you're left with giants that just sort of leave one another alone. This doesn't breed competition, it breeds complacaency and a market with extremely few choices.
I don't know the answer but this idea that corporations will fight for our dollar doesn't sit well with me, as the current state of healthcare options shows this to not be the case. The barrier of entry just on cost (equip, doctors, medicine) excluding regulatory issues is prohibitive, and doubly so for insurers. Disruptive forces that would provoke competition or a change in pricing just seems too difficult to get off the ground.
There are plenty of markets where competition drives the margins to near zero. I'm not saying medicine can or should be one of them, but something along that trend is wholly possible.
The government _does_ have a role in this. They need to be there to foster the healthy competition environment with appropriate legislation and regulation. Part of that healthy regulation is punishing highly illegal "no aggression pacts" and enforcing antitrust laws to prevent mergers that would suck out the competition.
Small states. And there _are_ problems with them, painting them all as perfect doesn't help anyone.
Not to mention that the US pays for much of the defense costs for NATO (on purpose with good reason) which further distorts what one country could actually afford and why you couldn't just force a different model on the US and expect success.
There have been many efforts to build state single-payer systems and they've all failed. Vermont got closest but couldn't find the money.
It's a big shift to the economy. Taking what's now a benefit for a huge chunk of workers and turning it into a tax of both businesses and individuals. It's not an easy thing to do, you have to adjust people's compensations to make up for it and lots of people will be unhappy with the change.
Not to mention incompetence and understaffing. One guy retires and now another is responsible for overseeing spending in two areas. And at least sometimes the bureaucrats aren't aware of the relevant laws.
When I was 24 I got in a skiing accident. I broke my femur into 4 pieces.
Ski patrol took me down the hill. They threw me in an ambulance. They gave me some pain drugs which blurred my memory. The ambulance took me to the nearest hospital. When I arrived there, they gave me several options to remedy my shattered leg. I chose one - the next day I could not remember the other options nor why I chose the option I did.
So I'm just curious. Where in that equation would open straightforward pricing have helped? Would I have refused an ambulance ride? Would I have done the research to call my own? Would I have requested to be taken to another hospital - the next closest one, by my guess, being an hour away? Should I call ahead and make sure their prices are reasonable?
I don't understand how the free market can work with medical care. People oftentimes are not in a position to make decisions based upon price. The free market answer to "not dying" is "I'll pay everything I have".
People sometimes aren't able to making decisions, but dire emergencies don't make up all of hospital care.
Even then, a counter anecdote, I live in a city with maybe 4 hospitals within minutes at any given time and another dozen within a half hour or so. In the most dire situations I would have a choice and with anything less than critical I have a wide variety of options to choose from. If I need medications there are dozens of pharmacies to choose from.
Yeah if you break your leg in the back woods, you're not going to have a choice for the initial care. But you will have a choice for any follow-up care. Also other people who aren't you using that same hospital will have choices between it and it's further away competition.
You're right the "I'm dying and far away from urban areas" is a pretty location-based captive market, but it's far from the whole market.
When I was a young teenager I broke my arm at a school event and ended up sitting in a hospital bed for hours waiting for them to find my parents to give consent for treatment. Even most broken bones have some pretty wide time periods to find and travel to the best hospital option. (Just not a broken femur, that shit is serious)
The US is the only first world country that has these problems. You don't need to come up with a fancy solution, just copy what another country does. It's not like it can get worse.
The US isn't the same as the rest of the first world (outmoded as that term is).
A disproportional amount of research and medical industry happens in the US. In a way, many of the developed nations' medical systems are made possible by the American medical economy. We end up paying for more of the development and exporting our technology for as much as we can get. The cost structure wouldn't be the same worldwide if America switched.
We have 50 states. Each one of them is capable of setting up a single payer healthcare system on it's own, yet none of them have. Not for lack of trying, but none have been successful. I don't think we should even have the national conversation at all until at least one state finds success implementing it themselves.
There are a large number of medical companies outside of the US as well. Additionally governments encourage research in general through patents and subsidies and provide direct funding. Not to mention that a lot of research happens at universities. Additionally many of these companies are located outside of the US.
Ignoring all of that just from a purely financial perspective, the amount of money spent on health care simply can't be explained through research, both in quantity and when it comes to the reality of what people actually pay for which treatments.
Medical research doesn't explain why people think twice about calling an ambulance or go as far as taking a taxi or driving themselves or a loved one to a hospital in an emergency. If you do that in Germany, you'll get a lecture and will be considered an idiot who has unnecessarily endangered themselves.
So the answer is "American consumers are suckers who are paying for the rest of the world, and there's nothing we can do about it"?
How about US prescription drug marketing costs (something that's illegal in most other countries)? Drug marketing costs are similar or higher than R&D costs in many cases - why does drug marketing even exist?
Drug marketing isn't illegal in most other countries, just marketing to consumers. You're free to market to physicians pretty much everywhere which is where the real money is spent anyways.
In Germany marketing to physicians is legal but doctors are effectively forced by insurance agencies to prescribe whatever drug is the cheapest equivalent unless there is a medical reason not to.
So even though there is marketing going on the actual effect is rather minimal.
The point isn't to have no rules... It's to ensure the ability to compete... right now certain protectionist rules only serve to help incumbents, and are only aided by lobbying efforts.
To countermand that, what is needed are policies to ensure competition. Compulsory patent licensing for starters, and a dual-source requirement for prescription medications paid for by the state would be another.
What we have had, and continue to have is not a free market, and it doesn't serve you to have it continue as such.
It's true that insurance companies have been fairly effective at keeping their costs down - mostly by finding clever (and often dubious) justifications for refusing to pay for treatments. This is of little consolation to the customers who've found that they can't get life-saving medical treatment due to insurance company shenanigans.
When was the last time a regulator (or government agency) admitted to failing because of incompetence, stupidity, or bad luck? It seems they are eternally underfunded and understaffed, and never make mistakes. I consider myself and my associates to be quite diligent and intelligent, yet every one of us is sometimes at fault when we fail.
The NTSB/FAA does a _great_ job of regulating. Aircraft have the beneficial property of being immune to bullshit. Mistakes, incompetence, and corruption lead very directly to planes falling out of the sky which is a very public and costly failure.
They're great because they have to be _and_ being great leads to success. You can, with solid engineering, completely understand and prevent failing. There aren't any act-of-God accidents. How and when aircraft fail is designed from the start; when they do fail there is always a cause and it's always fixable.
You can read plenty of NTSB reports about accidents (and they take mistakes which don't actually result in harm very seriously too) and they really do point out incompetence and stupidity. The most important part is that it isn't about blame or prosecution, it's about finding, fixing, and preventing problems. Revenge against people who screw up intentionally or not isn't helpful, making it impossible to screw up is.
All of the airplanes that crash were approved for production by the FAA. I am not sure how you would measure the failure rate of the NTSB, other than by looking at the number of repeated failures, which is tough, as many incidents are one-offs, or can be categorized as distinct without being substantially different.
In any case, one could regard the FAA's primary failure being that the airliner market is a duopoly. The FAA and its counterparts have helped make it so expensive to develop and approve new aircraft that only two companies can do it, and even they only design one new airplane every ten-twenty years. Bombardier, which is a large and established aircraft manufacturer could afford to develop an airliner, but not to get it approved; this results in slow progress, high prices, and little competition.
It would be interesting, if impossible to know how safe aircraft would be if Boeing and Airbus were granted an unregulated monopoly. I would guess their aircraft would be very safe and expensive (as they currently are), just like 'Ma Bell's service was in the days of its monopoly.
Every mistake, every crash is a failure and there are remarkably few of them. Mistakes happen and the mistake is always in not predicting the failure correctly.
And there's quite a bit of competition; Boeing and Airbus are integrators, they don't build all of the parts and there are plenty of parties competing for the various parts. Likewise they both make the largest aircraft exclusively, but as you get smaller you add more and more alternatives to the mix.
You're also wrong about no new models. They release updates and changes all the time. Completely new planforms just aren't needed. The basic design is fundamentally unchanged and doesn't need to be changed. There's just nowhere to go. Only small iterations of improvement.
There are plenty of opportunities for new models; Boeing wanted to make 3 new aircraft, and had to settle for 1 new and 2 upgrades. The 737 has been flying for almost 50 years, and Boeing still can't give it long enough landing gear to properly accommodate properly-sized turbofans because of the regulatory burdens. Bombardier thought there was an opportunity for a new single-aisle airliner, but hasn't been able to come up with the money to get a certificate.
The fact that there are no new aircraft manufacturers coming on-line only proves that the regulators have created a duopoly.
Looking around on the internet it sounds like the cost of the aircraft accounts for about 10% of the cost of a ticket. Frankly, airplanes sound downright cheap compared to the cost of staffing and fuel. Doesn't seem like the right place to start looking for cost-cutting measures.
If you want to understand how important new aircraft are, you need to take more factors into account, such as turn times, average numbers of transfers, etc. into account. The airlines have been moving away from the hub-and-spoke model, towards point-to-point for quite some time; aircraft CPM plays a significant part in this shift (as well as in slowing it down).
The larger Embraer E-Jet series (E170/175/190/195) jets do somewhat compete with the Boeing 737 & Airbus A320 for the regional market. The E195 is smaller, and significantly cheaper than the 737. The E-Jet has a respectable safety record, and few major accidents.
The DC-10 is notable for having several major crashes due to design flaws, which significantly reduced sales of that aircraft.
Yeah, they really warned the pants off those folks. Y'know, if they hadn't pulled a Shkreli and flown too close to the sun, this would have never come out.
What has to happen before regulation is more consistently applied here in the US?
Nobody in government wants to apply rules uniformly; they create broad, ambiguous rules, then apply them selectively to achieve their preferred outcomes. The people who have regulatory or legislative power want and/or need this arbitrariness to gain, maintain, and sustain themselves, their organizations, and their power.
Well, I come from a country with completely free-for-everyone healthcare(Poland), where lobbying politicians is super ultra illegal(important point here), and basically you can have any sort of treatment done for free(my dad was getting two boxes of Glivec a month for 8 years completely free of charge, in US they cost about $11k/box), and it's not ruining our tresury, because the government basically says to manufactuers "we are prepared to pay X for your drug, you can accept or we won't buy it at all". More often than not, supplying a whole country is lucrative enough that companies accept the offer, so manufacturers can't just go "by the way, we increased the price of our product by 100%, so you have to pay that now".
And if they don't, we have a cheap local company who will do the job just a bunch of percentage points more expensively. In fact, they will even research an alternative if needed on the meager science funding if at all possible.
The low funding is why you do not hear about groundbreaking Polish drugs.
