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0 pointsprofile532y ago0 comments

IIRC about 40 percent of all medical expenses are administrative costs and about 20 percent is drug costs. Improving those could drop healthcare costs by nearly half, without lowering healthcare salaries.

To lower medical salaries, we need to address (a) the AMA acting as a cartel, (b) residency slots being paid for by Medicare and being limited, and (c) crippling student debt problems. As an example, nurse practitioner salaries have dropped as supply has increased.

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qwytw2y ago

> Improving those could drop healthcare costs by nearly half

Wouldn't you have to decrease spending on admin and drugs up to 10x which would likely bring US well below the costs in most/all other rich c

I'm not sure how feasible it would be to reduce admin and drug costs by almost 10x?

Edit: to be fair 10x might not that far-fetched as I might have thought, admin costs are massively higher than anywhere else:

https://www.statista.com/statistics/1264127/per-capita-healt...

I'd assume the way they measure it might differ significantly between some countries. Also ~1000 is just 10% of per capita spending in the US.

If we look at drugs:

https://www.statista.com/statistics/266141/pharmaceutical-sp...

The gap is quite a bit smaller. Also in total drugs+admin seem to be about 25% or so?

twoodfin2y ago

Total per capita healthcare spend in the US is something like $13k, so yeah, much closer to 25% than 60%.

Also, you have to be careful about how you account for “administrative costs”. Medicare has low “administrative costs” but correspondingly high rates of fraud vs. a typical private insurer who has the incentive to spend more looking for it—administrative costs.

profile53OP2y ago

Huh, the numbers I’ve seen are much higher than that. 18% for prescription drugs [1], ~6% for retail drugs [1], and 34% for admin costs depending on how it’s accounted for [2]. A lot of places don’t seem to account for insurance related costs (billing/coding/etc.) in administrative costs, which may be the source of the difference.

[1] https://aspe.hhs.gov/sites/default/files/documents/88c547c97...

[2] https://time.com/5759972/health-care-administrative-costs/?a...

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