Health-care cost breakdown

[Darth Wong]

Does anyone know of a resource where one can find a breakdown of health-care costs by type of spending?

With all of these claims flying around about cutting costs by cracking down on pharmaceutical companies or eliminating medical malpractice suits or reducing administrative overhead, it would be nice to see what percentage of American health-care costs actually go into each category.

[tharkûn]

Not the best, but the easiest to find:

Quick and dirty statistics

[tharkûn]

I should mention that the cost for malpractice is nowhere close to the award amounts, CYA medicine rolls costs into all categories. You hire more paperwork pushers to catch errors in the paperwork you might be sued over, you give out more antibiotics so you can't be sued when somebody inevitably dies from complications, you probably kill a few women doing unneccessary C-sections so you don't get sued when a mother can't accept that her child's CP might be the fault of somebody other than the doctor (and certain scumsucking trial lawyers peddle junk science for bucko bucks to propogate the myth), etc.

The real cost of medical malpractice is extremely hard to quantify and depending on who makes the numbers up (like say plaintiffs vs. defendants or trial lawyers vs. insurance bean counters) you can see wild swings.

[The_Nice_Guy]

On a tangential note: Is there a global comparison study of health care costs and trends in the past 20 years? I can't be sure, but I think there's been a steady increase in healthcare costs all over the world, faster in some places, slower in others.

TWG

[Keevan_Colton]

<snip>

Some of this comes across as bloody good reasons why having medical care handled by those with a profit motive is bad.

[Nova Andromeda]

Does anyone know of a resource where one can find a breakdown of health-care costs by type of spending?

With all of these claims flying around about cutting costs by cracking down on pharmaceutical companies or eliminating medical malpractice suits or reducing administrative overhead, it would be nice to see what percentage of American health-care costs actually go into each category.

--IIRC, it was you that provided a resourse that said drug companies make 15% profits. Even if we eliminated that profit altogether I don't see how it would help much, but combined with other measures perhaps it would add up to something.

[Col. Crackpot]

--IIRC, it was you that provided a resourse that said drug companies make 15% profits. Even if we eliminated that profit altogether I don't see how it would help much, but combined with other measures perhaps it would add up to something.

what i want to know is what the hell these companies are spending on advertising! It seems these days that every other commercial is one for some type or prescripton medication. Most of which we aren;t even told what the goddamn drug is for!

That being said i am very leery of over reacting and placing servere restrictions on the biomed industry. It is one of the brightest spots in the economy right now. Profits are driving stock values (see: IRA's 401K's) up and the salaries that these companies pay are astounding! AMGEN and Dow both have major operations here and people are knocking each other over to get $16 an hour janitor jobs and $75K entry level engineering positions.

[Darth Wong]

That being said i am very leery of over reacting and placing servere restrictions on the biomed industry. It is one of the brightest spots in the economy right now. Profits are driving stock values (see: IRA's 401K's) up and the salaries that these companies pay are astounding! AMGEN and Dow both have major operations here and people are knocking each other over to get $16 an hour janitor jobs and $75K entry level engineering positions.

Ummm, you do realize that through private and public health care costs, you and everyone else in the general public pays for these profits, right?

[Petrosjko]

what i want to know is what the hell these companies are spending on advertising! It seems these days that every other commercial is one for some type or prescripton medication. Most of which we aren;t even told what the goddamn drug is for!

While I can't give you the precise numbers on total amount of spending in pharmaceutical advertising, I'm doing marketing research right now and can give you a couple of numbers on the costs of the advertising itself.

Average cost of production for a 30 second commercial spot, 320,000$, placement for a single commercial on a 4 week rotation, somewhere around three million. Numbers vary based on the types of timeslots purchased and so on, of course.

Additional expenses include test-marketing, which in the NYC or LA market can run upwards of 1.5 million if done via third-party contractors.

[tharkûn]

Some of this comes across as bloody good reasons why having medical care handled by those with a profit motive is bad.

How so? Scumbag lawyers can and do sue doctors who were working for charity as in pro bono medical care. The reason that CYA medicine runs up costs is that the costs of the lawsuit are paid by the doctor; the costs of CYA medicine are paid for by everyone else. Even though CYA medicine is FAR more costly, it is a better trade-off for the doctor.

Government medical programs suffer from the same problem, lawyers make no distinction between sueing a doctor at a for profit hospital, the local non-profit Catholic hospital, or the local government run VA hospital.

Besides which many insurers and healthcare groups are not for profit anyways. For instance my local Blue Cross and Blue Sheild is non-profit. Virtually every Catholic (St. whatever) hospital is non-profit. These places still get sued regularly and still practice much of the same crap that other for profit organizations witness.

--IIRC, it was you that provided a resourse that said drug companies make 15% profits. Even if we eliminated that profit altogether I don't see how it would help much, but combined with other measures perhaps it would add up to something.

It would probably kill the motive for the multi-trillion investment in bio-tech. It takes in the neighborhood of 800 million to bring a successful drug to market (including the cost of flops); right now it appears that productivity is taking a nose dive while R&D costs are steadily climbing.

Once a drug gets to market pricing is strictly as the market will bear. There is a reason that the first question a drug maker asks is "will this sell in the US". The only way around that is to go oligopsony or monopsony, both of which tend to lead to less dynamic growth.

what i want to know is what the hell these companies are spending on advertising! It seems these days that every other commercial is one for some type or prescripton medication. Most of which we aren;t even told what the goddamn drug is for!

Drug execs spend money on advertising in large part because people are stupid and their doctors are too ignorant or unwillingly to talk sense into them. Take a drug like Vioxx; it doesn't do a damn thing better than Motrin except it is far easier on the stomach. The vast majority of the population could take Motrin for a fraction of the cost and get the same medical benifit (the lesions in the stomach are generally not an issue) ... instead if the drug companies advertise millions of people go to their doctor and demand this new fangled drug and because most of them have insurance they don't pay any additional cost for a brand name.

It originally began when a study was done and they found that people who could be treated by this marvelous new drug weren't even aware they were suffering something serious. So drug advertisement began as an effort to educate the public that A: they had a problem and B: there was something they could do about it. This effect saves billions of dollars, it is MUCH cheaper to treat something like acid reflux diseases than to deal with the aftermath. Just about any condition that can be treated via drug is cheaper to treat that way than sending people to the hospital, even a 28,000 dollar per annum drug like Gleevac costs a fraction of the otherwise necessary surgical intervention.

From those noble and cost saving beginnings we saw the rise of basic consumerism. As noted above, people are clueless and if you advertise it, they will buy (especially when it costs them virtually nothing directly). Once the power of marketing became known, drug companies soon had to play "keep up with the Jones's". All told it is possible that we save money by bombarding the masses with drug advertisements that lead to earlier medical intervention and prevents costly hospitalization and surgical intervention. It is equally possible that we waste loads of cash on medicines we don't need and advertising fees. A few people argue that the drug companies would make money if everyone stopped advertising, they are generally thought to be wrong.

The basic problem is that the public thinks there is one magical expense called "healthcare" which should stay constant in cost overtime. Really the world is consuming exponentially more healthcare, if it weren't for more cost effective medicine we'd have all gone bankrupt in the '70s. Even if we eliminated corporate profits, abolished questionable benifit drugs (i.e. Vioxx vs Motrin), and went full monopsony, the cost would still be skyrocketing. Everytime a drug cures a condition it adds months and years to your life expectancy; expensives years in which you will most likely consume more medicine and medical services. The only sure fire way to keep down health care costs is to die young.

That is not to say the system isn't riddled with waste and inefficiency. Billions could be saved if we simply standardized the bloody paperwork, not even fighting the battle for full monopsony and nationalization ... just tell the industry to standardize the paperwork in a cost effective manner or threaten to have Congress do it for them. As long as this is coupled with government medical programs coming onboard and stopping their current habit of yearly changing the paperwork ... boom billions of dollars saved. Educating doctors about when new medications are cost effective ... boom billions of dollars saved. Cracking down on lottery lawsuits with a uniformly enforce loser pays system, maybe capping the amount of punative damages the plaintiff can receive (the rest going to charity or something) .... boom billions of dollars saved. Crushing the bottleneck on training doctors and especially nurses ... boom billions of dollars saved (not to mention lives).

Of course for such steps to be taken the politicians in the US would have to pull their heads out of their asses, not turn the debate into one of ideology, and generally do their job ... so I'm doubting a damn effective thing will be done.