Request: A Generlal Explanation of the US Healthcare System

Cielingcat · Post by **Cielingcat** » Wed Apr 22, 2009 3:07 pm

I am writing a research paper comparing the US and French healthcare systems. Finding data on why the French system's costs, benefits, and overall everything is better has been generally easy, but I am not entirely sure how to frame searches for how exactly the two systems function. So what I need is broad overview on how each one works, with as much detail as you're willing or able to go into.

I need the information on how the US system works more than I need the one for the French one, as my research on the later has been more successful.

What I do know is that the French system is a public/private mix with an emphasis on public, with the government paying for the majority of care and regulated private insurance providing the rest. The government also funds hospitals and, I think (but am not sure), medical students, as an investment in healthcare infrastructure.

What I know about the US system is that relatively less regulated private insurance covers almost everything, with the government stepping in to cover a few people in a (possibly inadequate and overexpensive) way via Medicare and Medicaid.

As the workings of the systems should probably be common knowledge, I probably do not need citations on them, but if you do have them they would be helpful.

Thank you for your help.

Gelare · Post by **Gelare** » Wed Apr 22, 2009 7:54 pm

I'm not an expert, so I can't promise fully accurate information, but I'll try to do what I can. The system is largely privatized, with private doctors, private hospitals, private pharmaceutical companies, and private health insurance companies. The most common type of health insurance provided used to be the Health Management Organization, or HMO, which you may have heard of, and of which Kaiser Permanente was arguably the best known, but companies have since built off of that model, and now the most common is the Preferred Provider Organization, or PPO. Whichever plan you buy normally involves some combination of Deductibles, Co-payments, and Co-insurance.

There is a proliferation of different types of health insurance, from full coverage to catastrophic-only and a bunch of stuff in between. There is a government program that the Republicans like, called the Flexible Spending Account, which combines a catastrophic-only insurance plan that you buy for yourself with a special savings account which can only be used for health purposes, but which is tax-free. Thus, if something really bad happens and you need lots of expensive surgery, your insurance covers you, but for routine and low-cost stuff, you have to pay for it yourself (with tax-free dollars). This aims to reduce the problem of moral hazard, which I assume you're familiar with, which is the problem that when someone else is paying, I have no incentive to limit my consumption to efficient levels.

Medicare and Medicaid are special government programs, which as far as I know apply to old people and poor people respectively. They involve a special kind of fee structure involving Diagnosis-Related Groups, which aims to keep costs low by paying the hospital a fixed amount for a given diagnosis, and not allowing them to charge more than that amount. As the baby boomers age and enroll in Medicare, the costs are projected to spiral straight into crazy town, although naturally no one is doing anything about it.

I hope that's helpful.

Gelare · Post by **Gelare** » Wed Apr 22, 2009 8:06 pm

A couple more things:

To the best of my knowledge, Medicare isn't especially inefficient; many private insurers have begun to pick up their DRG-based model, since it seems to do a good job of lowering costs. It is, however, incredibly expensive, since it does cover a lot of stuff and has a ton of enrollees.

There are also different plans within Medicare that one can select, some of which you have to pay for (however, the costs are, if I remember correctly, 75% subsidized by the government, so you only have to pay a quarter of the price).

Lich-Loved · Post by **Lich-Loved** » Wed Apr 22, 2009 8:21 pm

One critical point to research is tort law (the law concerning personal injuries). The US is crazy with its brand of tort law and medical malpractice (doctors making mistakes that injure the patient) is a huge barrier in the US health care system. The US's insane tort laws drive medical costs ever higher as doctors are forced to have insurance that costs thousands of dollars a month to protect their practices against claims of malfeasance. In France, torts do occur, but the huge damages so common in US medical malpractice suits are virtually non-existent in the French health delivery system, just as they are in the rest of Europe.

Edit: You can find info on french medical torts here and some info on US medical malpractice here
You can find some medical malpractice insurance rates for New York state here. Yes, that is right, an Ob/Gyn (baby delivery doc) pays $186,00 annually in medical malpractice insurance in New York City.

Gelare · Post by **Gelare** » Wed Apr 22, 2009 8:28 pm

Yeah, the U.S. is the most litigious nation on the planet, with more lawyers per capita than anyone else by a ridiculous margin. Damage settlements are regularly in the millions of dollars, and malpractice insurance is crazy expensive. Of course, another reason why costs may be high is that whoever it is that regulates how many people per year can enter med school (the AMA, maybe? Someone else? I forget.) has an actual monopoly on licensing doctors, and they restrict the supply of entrants to med school to keep doctors' wages high.

EDIT: Of course, it may be that you want the supply of doctors to be restricted to only the very best of the best, since an incompetent doctor can straight up kill people by virtue of being a physician. But it's not obvious that you'd want this, and no matter what it does drive up costs, so.

Username17 · Post by **Username17** » Wed Apr 22, 2009 8:50 pm

One of the most perplexing things about the US medical system is that everything costs nearly 50% more than it does elsewhere for no reason. That is, everywhere else on Earth the governments bargain with drug companies and make counter offers. In the United States, the big G just writes Merck a big check after subsidizing all the medical research in several ways.

Seriously. This is not even a secret. It isn't just that the US system places the costs of healthcare onto the sick (who usually can't pay) rather than the able bodied taxpayers (who can), it's that we also get charged extra money for what medical materials we receive. That's just dollars into a black hole as far as anyone who isn't Bayer is concerned.

Also, we have guaranteed medical service but not payment for people in Emergency situations, but not for other people who need health care. This one is a little hard to describe, but I used to work in emergency medicine so I'll do my best. See, if someone has a medical emergency, then you must treat them whether they can pay or not. Then it falls to the organization to try to figure out how to shake down the patient and/or some insurance company or whatever to reimburse themselves. Here's where it gets sticky: emergency care is really expensive. And when it's run for profit it becomes even more expensive. But if you simply don't pay your bills, it's the only kind of medical care that's totally free - because you don't have to pay any money before you get wheeled through that door and you can just hang up on your creditors afterward. This means that people who have degrading conditions are required to sit around and wait until their condition becomes an emergency and then they get treatment at that point.

This ties up the most expensive resources of the hospital. And it then leaves the highest rate of non-reimbursement on the resources of the hospital that are most expensive to run. A process which shifts those costs onto paying customers because the hospital needs to make up the money from somewhere to stay in business.

And this means that in times when people genuinely have emergencies, that a disproportionate amount of money needs to be produced from somewhere. A process that forces people into litigation on all sides.

Basically, demanding that people who have been hospitalized come up with large amounts of money to cover all of the emergency medical expenses of the population is totally fucking insane. Not only are they the people least likely to currently have an income, but the resulting uncertainty puts a huge bureaucratic load on healthcare providers.

-Username17

angelfromanotherpin · Post by **angelfromanotherpin** » Wed Apr 22, 2009 8:55 pm

One of the biggest factors inflating health care costs in the U.S. is that insurance companies maintain enormous bureaucracies which employ people to make sure they pay out on as few claims as possible.

That's right, your private health care costs are higher because you are paying for extra people to figure out how to screw you.

Crissa · Post by **Crissa** » Thu Apr 23, 2009 12:15 am

Actually, US tort law has nothing to do with the cost of medical malpractice insurance, neither does the rewards, which are usually not as large as seen in the media, because courts usually back them down or settlements are made.

Mmm... I'd have to go back a few years to find this data, but basically every state that's limited malpractice rewards or otherwise given into insurance company demands has not seen any reduction of those fees. Add to that nearly any case you can cite probably doesn't exist or the details are wrong; such is the argument about 'tort reform'.

The fees are dependent entirely upon the profitability of the short-term investment market, since most insurers are publicly traded companies which require ever increasing profits. - Which, by the way, is entirely incompatible with long-term mitigation of costs or liability.

-Crissa

Lich-Loved · Post by **Lich-Loved** » Thu Apr 23, 2009 1:06 am

Crissa wrote:Actually, US tort law has nothing to do with the cost of medical malpractice insurance, neither does the rewards, which are usually not as large as seen in the media, because courts usually back them down or settlements are made.

No. From the article (Connecticut Legislative Committee 2003):

Forty-three Connecticut plaintiff awards in medical malpractice cases totaled $54.5 million dollars in the aggregate, made up of $9.5 million in economic damages (21 percent) and $45 million in non-economic (79 percent)
The average total award amount was $1,266,348, with the average economic damage amount $220,927 and the average non-economic damage amount, $1,045,420. The median total award amount was $600,000. The difference between the average and the median amounts indicates the wide spread of individual award amounts.
The individual awards ranged from a low of $30,040 to a high of $8,120,000. Fifty percent of the awards were $600,000 and below; the top 25 percent ranged from $1.8 million to $8.1 million.
Insurance carrier losses for medical malpractice in Connecticut have increased more than the national experience. Nationally, over the last 12 years, incurred losses increased on an inflation-adjusted basis 97 percent, but the increase was over 340 percent in Connecticut.
There are four major determinants of insurance pricing: expected losses, expenses, profit and contingencies, and investment income.
The cost to pay for losses is the largest component of the premium.

If you are interested in actually learning about the drivers behind medical malpractice insurance rates, you might consult the GAO's whitepaper on the topic, which confirms the above and provides a great deal of insight into the matter.

Crissa · Post by **Crissa** » Thu Apr 23, 2009 3:19 am

Yeah, it'll take me some time to refute it, but I'm positively certain that's full of bullcrap, LL.

First off, without looking at it, I'll point out that that article completely avoids any sort of comparison numbers under different law regimes. Which make their numbers utterly useless to respect of their implied solution.

None of that legislative statement actually proves any points, LL. It's not scientific. There's no graphs, no data, hardly any glossary. Don't be an idiot and bring links if they aren't actually going to, I dunno, do anything but refer around in circles.

It takes more than a single point to make a graph, and yet, that's what you've provided us. A single point. It doesn't say things got better or worse, or how, or compare states that passed laws with the states that did not have those laws. It's utterly useless.

Nothing in your links are even vaguely useful.

-Crissa

I have literally spent years reading this stuff, so you've got work to do to actually bring a point I haven't heard before. This isn't exactly my job, so finding resources on the subject will be harder than it should be, but Kevin Drum is a good place to start, if you can find his articles from before 2004.

cthulhu · Post by **cthulhu** » Thu Apr 23, 2009 4:52 am

The CBO refuted the tort law arguement. It does cost more than everywhere else yes, but it doesn't matter - it's only a tiny percentage of the costs - like a few percentage points, which doesn't explain why care in the US costs as much as everywhere else.

What does cost serious money is the administrative costs. The US health system has the largest beaurcracy of any health system anywhere, and this is estimated to account for up to 50% of the cost of treatment. Which is.. a shitload.

Anyway the reason why you've having trouble with a clear description of the American health system is that its even more confusing than Australia and germany, and I thought they were bad.

There is atleast 4 parallel health systems (Private health insuranceon a co-pays basis, managed care organisations, Medicare and State assistance), serviced by a hodge podge of stuff. You really need to break down each and every service offering individually - State assisted, Private Health insurance and managed care - then analyze them in turn. They are literally trying almost every model of healthcare at once (just not public health insurance with co-pays), so the situation is very confused.

Within that pile of crap, the only manageable & sustainable models are veterans affairs - the VA delivers a great service - and the HMOs.

Those models are actually fundamentally similar to how the NHS works too, incidentally. America would probably be better off if it just outsourced its entire healthsystem to Kaiser Permanente, or brought KP in house.

Comparing the US healthsystem as a whole to anything is intellectually unintresting because it is a bad system - benchmarking against the UK is a much more intresting choice. Or one of the components of the US - KP as a HMO or Veterans Affairs.

Altenatively, The UK (or potentially Canada) is the 'other way' to manage publically delivered healthcare, and gives them a very different experince. I also suspect that in the long term, if you are to embrace public healthcare, the UK model is ultimately going to be universally adopted because it has the most effective cost controls.

You'll be able to show a real dilemma, especially if you project costs forward - Canada and the UK have the best cost controls by a long way.

Neeeek · Post by **Neeeek** » Thu Apr 23, 2009 10:43 am

Gelare wrote:Yeah, the U.S. is the most litigious nation on the planet, with more lawyers per capita than anyone else by a ridiculous margin.

This isn't even remotely true. People get this idea due to the fact that people we'd consider to be lawyers in the US aren't considered lawyers when counted in other countries.

Username17 · Post by **Username17** » Thu Apr 23, 2009 12:14 pm

LL, 55 million dollars sounds like a lot, especially for 43 plaintiffs. But that's the plaintiffs who win their cases, not the total patients in Connecticut. That state has 3.5 million people in it, and 55 million dollars is 15 dollars a person. Now as it happens, the people of the USA spent about $7,900 dollars per person on healthcare back in 2007. Making the alarming sounding numbers you quoted amount to less than one fifth of one percent of the total healthcare costs.

So really what you've just shown is that torts are essentially meaningless in the face of the healthcare costs of the people of Connecticut. Your figures support exactly the opposite point that you were trying to make. American malpractice awards sound ominous, but against the staggering costs of the system as a whole their effects are not statistically significant.

It's like people yelling about the AIG bonuses. Yes its offensive, but no removing them will not fix anything. Millions are literally a thousand times smaller than Billions. Even chasing cost cutting on that end probably qualifies more as a distraction to prevent real change in the real places that would really help.

-Username17

Lich-Loved · Post by **Lich-Loved** » Thu Apr 23, 2009 1:01 pm

Frank, you are quite correct. The claims numbers were all I could find in short notice and just as Crissa pointed out, don't mean squat. There was a much better report with some good charts and numbers nationally, including payout rates, successful claims vs filed claims and so forth, but I lost track of it. I will see if I can find it. It may well prove out your point on the statistical significance of the costs and if so I will stand fully corrected.

What I think we can both agree on is that the current US system is horribly expensive and inefficient. What I hope for in health care reform is something that is actually useful. I have a friend in England that told me appalling stories of her childbirth experience there (she is a US ex pat married to an English gent), my English friends on both sides of the water have terrible teeth, and my personal experiences in Turkey were...dreadful.

You may be be able to verify something I saw on Discovery, which had a special on Germany's health care system. They basically followed a doctor about while he did his job and explained the system. He was a GP with a regular/typical business in his words. He basically explained that he is given a stipend for his services every quarter by the government against which he draws his pay for seeing clients. For example, he made a half-hour house call (unheard of in the US of course) to an elderly couple that both had diabetes. His checkup on them lasted 30 minutes, for which, he explained, he could draw 37 Euros from his stipend account. The problem was, he had run out of his stipend, and was not going to be compensated for the visit. He explained that as the quarter drew toward a close, doctors were either forced to work for free or many of them stopped working when the stipend account was empty until the next quarter. Have you any information on this? This is the kind of thing I don't want to happen here in the US.

Count Arioch the 28th · Thu Apr 23, 2009 1:42 pm

Anyone who complains about American torte laws aren't human beings anymore. They've sold their minds and souls to the big corporations, and should be treated as objects, not people.

If America passed laws saying you couldn't sue, all that means is the bastards will be able to embezzle more millions, and the prices for us won't drop one cent. All you did was make people who doctors screwed up on unable to seek any retribution.

Username17 · Post by **Username17** » Thu Apr 23, 2009 2:28 pm

Lich Loved wrote:The problem was, he had run out of his stipend, and was not going to be compensated for the visit. He explained that as the quarter drew toward a close, doctors were either forced to work for free or many of them stopped working when the stipend account was empty until the next quarter. Have you any information on this? This is the kind of thing I don't want to happen here in the US.

What's the problem?

Working long hours as a medical practitioner increases the number of mistakes that you make. And while there is a literally bottomless need for our services, there is a point of diminishing returns where one's ability to help drops with physical and mental fatigue.

The BRD has a hard cap on how many hours a physician can work for money, precisely to encourage them to take some time off and get some sleep. Otherwise, you know a lot of us just won't. Indeed, you'll notice that when confronted with the choice of "do charity work" or "get some sleep" that a lot of us choose the charity work. Because well, we're doctors and that's how we roll.

My own plans involve spending a certain amount of each quarter working with Doctors Without Borders, and the European paid work cap is an excellent incentive for me to do that. In the absence of work caps, a lot of physicians just work themselves to death and that just doesn't help anyone.

-Username17

Gelare · Post by **Gelare** » Thu Apr 23, 2009 4:18 pm

Neeeek wrote:
Gelare wrote:Yeah, the U.S. is the most litigious nation on the planet, with more lawyers per capita than anyone else by a ridiculous margin.
This isn't even remotely true. People get this idea due to the fact that people we'd consider to be lawyers in the US aren't considered lawyers when counted in other countries.

Um...pics or it didn't happen?

Okay, your turn.

Neeeek · Post by **Neeeek** » Thu Apr 23, 2009 4:49 pm

Gelare wrote:
Neeeek wrote:
Gelare wrote:Yeah, the U.S. is the most litigious nation on the planet, with more lawyers per capita than anyone else by a ridiculous margin.
This isn't even remotely true. People get this idea due to the fact that people we'd consider to be lawyers in the US aren't considered lawyers when counted in other countries.
Um...pics or it didn't happen?

Okay, your turn.

Wow. That link is just plain idiotic.

First of all, there are just under 1 million members of the ABA, and if you aren't a member of the ABA, you aren't a lawyer in the US. There are over 300 million Americans, so you do the math. It isn't 1 in 265. The numbers they are using are just plain wrong. And not all of those people are even practicing attorneys.

Second, in the US, there is exactly one type of lawyer. "Someone who has passed the bar exam for the state in which he or she practices." Other countries have more divisions, which are routinely missed in these sorts of studies. For example, when they count places like Japan, they tend to only count bengoshi (which would be the equivalent of a trial lawyer in the US and there are entire counties without them in Japan), while not counting gyoseishoshi or benrishi or the three other lawyer-like classifications they use whose names I can't remember how to spell. France I know has several distinct types of lawyers who has specific roles that don't overlap.

I'd link you to the information, but I doubt you have access to legal databases, which is the only place you can really find this sort of information.

Gelare · Post by **Gelare** » Thu Apr 23, 2009 5:26 pm

Neeeek wrote:I'd link you to the information, but I doubt you have access to legal databases, which is the only place you can really find this sort of information.

Oh come on, I have to call bullshit on this. "I want you to meet my girlfriend, but she lives in Canada! Err...or Atlantis! Yeah, you can't go there, sry!" I hear you that there are different kinds of legal professionals in different countries, that's fine, but seriously man. Numbers.

Crissa · Post by **Crissa** » Thu Apr 23, 2009 5:53 pm

No, it's true. Databases with pay for play are common.

This is why we have reporters and researchers that we then trust by peer reviewing their findings that they publish, usually in magazines, sometimes openly on the internet, but often not.

If you need more detailed information, seek down a research librarian at your local library or university, and ask for help on finding this information. Sometimes they'll have purchased access to these databases for you. Some court house law libraries do as well, but fewer of them have stipulations for public access.

Beyond that, I have trouble understanding what point you're trying to make... I could easily find articles on relative number of cases per capita, or rewards per GDP, but neither of those really have anything to do with litigiousness, and yet, they'd be all we really have.

-Crissa

Lich-Loved · Post by **Lich-Loved** » Thu Apr 23, 2009 7:00 pm

FrankTrollman wrote:What's the problem?

The problem was that not all doctors were as magnanimous as the subject. While I know that doctors aren't in it for the money, the subject indicated that many of his coworkers just go on holiday when out of funds, which means that patients are left waiting for a physician's appointment until the new quarter comes along and the backlog of appointments made in advance of theirs that are also waiting on the new quarter is cleared. Finding a physician that hasn't emptied his stipend or one willing to work even more time for no return was basically not possible, so patients end up waiting and waiting and waiting for care.

Username17 · Post by **Username17** » Thu Apr 23, 2009 7:31 pm

Lich-Loved wrote:
FrankTrollman wrote:What's the problem?
The problem was that not all doctors were as magnanimous as the subject. While I know that doctors aren't in it for the money, the subject indicated that many of his coworkers just go on holiday when out of funds, which means that patients are left waiting for a physician's appointment until the new quarter comes along and the backlog of appointments made in advance of theirs that are also waiting on the new quarter is cleared. Finding a physician that hasn't emptied his stipend or one willing to work even more time for no return was basically not possible, so patients end up waiting and waiting and waiting for care.

So... what's the problem?

Look, there aren't enough doctors. Period. It costs a million dollars to train a doctor and most people can't hack it. And every doctor you have teaching is another doctor you don't have practicing. Also, it's hard to get cadavers in most countries, especially when there are a lot of religious people running around. In addition, doctors need to take time off or they burn out and quit or become stressed and make more mistakes.

Yes, Deutschland has mandatory time off for their doctors. This keeps them sharp when they are on the job. In addition, they don't have enough doctors because globally there are not enough doctors! What would you have them do? Work the doctors they do have until they die?

-Username17

Gelare · Post by **Gelare** » Thu Apr 23, 2009 7:41 pm

Crissa wrote:No, it's true. Databases with pay for play are common.

Yes, Crissa, I know they exist, but you have to understand that when I have given any numbers at all and the other dude has claimed there are numbers but hasn't produced any, I'm not really inspired to jump onto his bandwagon, here. He may well be right, it wouldn't really surprise me, but I have offered any evidence at all and he has said that his are hidden behind the curtain, so hey, whatever.

Username17 · Post by **Username17** » Thu Apr 23, 2009 7:47 pm

Gelare wrote:
Crissa wrote:No, it's true. Databases with pay for play are common.
Yes, Crissa, I know they exist, but you have to understand that when I have given any numbers at all and the other dude has claimed there are numbers but hasn't produced any, I'm not really inspired to jump onto his bandwagon, here. He may well be right, it wouldn't really surprise me, but I have offered any evidence at all and he has said that his are hidden behind the curtain, so hey, whatever.

Neeek is in law in the US. He is a primary source on matters of the legal profession in the US.

-Username17

Gelare · Post by **Gelare** » Thu Apr 23, 2009 8:37 pm

FrankTrollman wrote:
Gelare wrote:
Crissa wrote:No, it's true. Databases with pay for play are common.
Yes, Crissa, I know they exist, but you have to understand that when I have given any numbers at all and the other dude has claimed there are numbers but hasn't produced any, I'm not really inspired to jump onto his bandwagon, here. He may well be right, it wouldn't really surprise me, but I have offered any evidence at all and he has said that his are hidden behind the curtain, so hey, whatever.
Neeek is in law in the US. He is a primary source on matters of the legal profession in the US.

-Username17

I don't doubt that he's a smart guy, and I'm totally prepared to believe him, but until I get any evidence at all he's just someone somewhere in the field of law. I wouldn't take the stuff that K says about law as gospel either (assuming he's still doing that), just like how you don't take my positions on economics without further verification. Honestly, all I'm asking for here is one step above hearsay, is that really so much to ask?