This describes the biggest problem in US healthcare. No clear and consistent pricing. If we had a real market, you would get a prescription and then go to the seller with the lowest price. And everybody would get the same price. This whole business with PBMs that are owned by the insurance companies, discount cards and other shenanigans just invites corruption.
For example, this place does it:
https://surgerycenterok.com/surgery-prices/
Insurance companies do not force the sellers to use complex billing practices, they would benefit from more transparent pricing (since they are seeking to pay less).
The root cause is healthcare is inherently complicated and complex, it has a problem of supply being nowhere near demand, and since prices for things are so high (including liability), there is a lot of cover your ass and fraud prevention going on.
I even provided an example of a healthcare provider choosing to be more transparent. It is always Eli Lilly’s choice to sell their medicine at a flat price to everyone. But it is also in Eli Lilly’s benefit to engage in price discrimination, so that they get paid more by people who can pay more:
https://en.wikipedia.org/wiki/Price_discrimination
Another example of this was when I was in college, US textbooks cost multiple times more than the international version of the textbook I could buy on Abe books or whatever website. Or, coupons for grocery stores. The insurance company has no hand in this.
To be clear, insurance companies also cause waste, because the government does not audit them, and the insurance companies are not staffed appropriately to resolve disputes in a timely manner.
Get rid of the patents and this will solve itself in no time.
> The insurance company has no hand in this.
False. Insurance companies in the US own stock in big pharma firms like Pfizer, Johnson & Johnson, Eli Lilly, etc. They maintain substantial investment portfolios and generate returns on premiums and reserves. They also have voting rights as institutional investors.
> False. Insurance companies in the US own stock in big pharma firms like Pfizer, Johnson & Johnson, Eli Lilly, etc. They maintain substantial investment portfolios and generate returns on premiums and reserves. They also have voting rights as institutional investors.
This is a wild assertion. The sum total of all 7 publicly listed insurance companies’ market caps is less than Eli Lilly, just one pharmaceutical company. I would need some evidence before believing that health insurance company leaders have any influence on pharmaceutical companies.
I would also be surprised to learn insurance companies hold specific stocks, seems like a risk insurance companies would not take, especially ones that have lots of routine cash expenses. They spend ~85% of their premiums on medical expenses, and probably at least 5% to 10% on their own staff, so they shouldn’t even have much extra cash left to invest for the long term.
https://www.oliverwyman.com/our-expertise/insights/2023/mar/...
Edit: to respond to comment below about net income, that Yale link does not seem relevant as it is for all healthcare companies. All 7 publicly listed insurers’ combined annual net income is $35B or less for the previous 20 years, at a profit margin of 3% or less, which is peanuts.
COVID mRNA vaccines (Pfizer-BioNTech, Moderna) got billions in public funding. Yet, patents usually belong to the private company and prices are not capped as a condition of public funding. It is gross corruption begging for heads to be put on pikes.
But instead, people rail at health insurance companies and pharmaceutical companies and others who can’t or won’t make a difference.
Because this is the Corrupt Evil Nexus that continues to ensure that taxpayer funds and exclusive patents keep flowing to them, while keeping prices high. They buy political power via campaign financing by the bucketload and the congressman/woman changes their vote to kill/oppose bills that would make a difference. You can find dozens of examples. Do your own research. As an example, take a look at the voting for the bill to permit Medicare to negotiate drug prices. Look at who received bribes and from whom to vote "No".
Why are we using market cap as a metric ? Look at investment value.
From the NAIC report at https://content.naic.org/sites/default/files/capital-markets..., common stock holdings alone of U.S. insurance industry is roughly ~$1.2 trillion.
"Over the past 20 years, health care companies spent 95% of their net income on shareholder payouts, totaling up to $2.6 trillion, according to the research findings. Shareholder payouts also tripled over this period - a trend largely shaped by a few powerful pharmaceutical companies, the research team noted."
https://medicine.yale.edu/news-article/health-care-company-p...
It took me two weeks, dozens of phone calls, and multiple "escalations" to learn what would be covered and what the price would be if it wasn't
Totally insane. The kicker is that after all that, the price I was billed wasn't even the price I was given (thankfully it was less though).
Also I went in for a colonoscopy and an endoscopy. Insurance was billed for $14000. I got statements from 4 different doctors, and the facility where it was performed. None of the statements matched the explanation of benefits from the insurance company. And when I called each doctor, to pay them, they all told me that I didn't actually have to pay them what it said I owed. So I just ended up paying $2500 to the insurance company. It again, makes zero sense.
OH YES THEY ABSOLUTELY DO!
When I was in-between jobs I had a medical emergency and I was on the ACA around the first year it was offered. I was billed above medicare rates so I was on the hook for ~40k after out of pocket max. They told me this limit is what insurance has to cover but hospitals can still bill above it. First they told me they could work on the prices and asked for my last 5 years tax returns. When they saw that I had dividend payments they said they couldn't help me and I owed them the $40k. I think that was the problem because even though I wasn't working in their mind if I had investments then technically I was "not in need" so they set up four-year payment plan and paid every penny with no cost reduction.
I probably did something wrong but to this day I didn't know what I would have done differently. The only people I could talk to were the hospital and they only cared about the hospital.
I’m reaching the point where I don’t really care if it’s private or public, but what we are doing today is the worst of both worlds. It either needs to be fully private, maybe with mandatory insurance purchase, or it needs to be fully public, though that has its own baggage.
Insanely comical.
Some experts report that PBMs overcharge for generics; The Wall Street Journal estimated that Cigna and CVS Health, both of which own PBM services, are able to charge prices for specialty generic drugs that are 24 times higher than what manufacturers charge.
https://www.americanprogress.org/article/5-things-to-know-ab...
It's hard to say that it isn't racketeering at this point.
"Specifically, a racket was defined by this coinage as being a service that calls forth its own demand, and would not have been needed otherwise."
There's demand for the meds, but the demand for discount cards, forcing people to use specific services/companies, and related programs is all invented by the companies themselves.
This sounds like typical negotiating 101. You know you are going to be forced to lower from your starting position, so increase your starting position so when you do negotiate down you are closer to where you wanted to be.
It would end inflation within 90 days
Even their silly 15% tariff fallback law abuse would be more sane than the 50-150% currently
Next few years is going to be insanity
The lesson has been learned by this point though, even a day laborer is holding silver and crypto nowadays because we have in recent memory the COVID shenanigans of mass QE.
People in China and Russia have basically taken for granted so long that their currency is completely manipulated, they all already knew to not be hoodwinked.
Few days ago, Donald Trump pressured Emmanuel Macron to raise the prices of all medicines. The pressure was made with unspoken threats [1].
[1]: https://www.tf1info.fr/international/trump-se-vante-d-avoir-...
Furthermore how Macron can increase prices of drugs? I was thinking that Americans are all about free market.
If given two options, they will take the one that will hurt more people, every day of the week.
bediger4000•2h ago
dfxm12•1h ago
nozzlegear•1h ago
mikestew•1h ago
mystraline•1h ago
dfxm12•1h ago
munksbeer•1h ago
dfxm12•58m ago
JumpCrisscross•1h ago
The article is about drug pricing, which is the part I found interesting (and by extension thought we’d find interesting). I thought taking it out both saved space and made the comments less likely to veer into flamebait.
bediger4000•1h ago
mistrial9•1h ago
ref- The Billion Dollar Molecule
KumaBear•1h ago
showerst•1h ago
I can think of a number of things.
blackbear_•1h ago
mmooss•1h ago
dfxm12•1h ago
no_wizard•1h ago
Healthcare, like real estate, is a dysfunctional marketplace lacking real competition
pepperball•1h ago
hypeatei•23m ago
This is a trope among populists: pass legislation around <thing>, observe consequences of doing so, blame the "free market", repeat.
blackbear_•12m ago
A look at how European governments negotiate with pharma companies helps explain why Americans pay more for prescription drugs.
https://news.stanford.edu/stories/2024/11/what-other-countri...
dfxm12•1h ago
https://www.healthsystemtracker.org/brief/how-medicare-negot...
le-mark•1h ago
This is satire btw.
BiteCode_dev•1h ago
The European pharma companies are doing more than fine, despite their main market being heavily regulated and price-controlled.
The less charitable explanation is that US companies want to charge outrageous prices, and the American system let them to, so they do it.
That's what the USA are: a machine to prioritize profits over people. Sometimes it turns out fine, like for the startup scene. Sometimes it's terrible, like when lives at stake.
Other explanations sound like heavy copium to me.
megaman821•1h ago
mmooss•1h ago
gruez•1h ago
Turns out all the low hanging fruit have already been picked, so the only "more efficient ones" left are stuff like gene therapy, which are absurdly expensive, but still theoretically cheaper than a lifetime of care. Unsurprisingly the high sticker price draws much backlash from the public and politicians.
mmooss•1h ago
What is that based on?
Also, I'm not talking about 'low hanging fruit' necessarily; only solutons that become cost effective for vendors if drug prices aren't so extreme.
There's reason to think there is low-hanging fruit: Research is incentivized for the most profitable solutions for the vendors, not the most cost-effective solutions for patients.
acdha•1h ago
jandrewrogers•1h ago
BiteCode_dev•45m ago
- Doesn't make them non viable without the American market, just less rich.
- Doesn't reflect the 5 to 10 times higher price Americans pay for the same drugs.
You can have a healthy industries with plenty of billions to be around and have decently priced drugs.
What you get in the US is uber profitable industries and people scrapping around.
Workaccount2•1h ago
Drug maker thinking
eptcyka•1h ago
tokai•39m ago
vkou•29m ago
Foreigners aren't the reason American healthcare sucks. Stop looking for people to blame abroad, all the sources of your problems are in the presidency, congress, and in the boardroom that directs the former.
JumpCrisscross•1h ago
Isn’t this any capital-intensive business with variable demand?
yibg•15m ago