The horrendous cost of health care

These numbers from the Miliman Research Report are stunning. This situation cannot possibly be sustainable for most Americans, and I have little faith that the Affordable Care Act will reduce these costs. I want to believe that the ACA will address costs, but I simply can't believe this. It's also amazing that in light of these numbers, and in light of the recent blockbuster Time Magazine article, "Bitter Pill," America seems incapable of having a rational conversation about what it really needs to do to reduce these horrendous costs.

Last year, when healthcare costs for the typical American family of four exceeded $20,000 for the first time, the Milliman Medical Index (MMI) compared the cost of a family’s healthcare to the cost of an average midsize sedan. This year, with costs exceeding $22,000 ($22,030), we note that healthcare costs for our family of four are almost as much as the cost of attending an in-state public college ($22,261) for the current academic year. The total share of this cost borne directly by the family—$9,144 in payroll deductions and out-of-pocket costs—now exceeds the cost of groceries for the MMI’s typical family of four. The out-of-pocket cost alone—$3,600 for co-pays, coinsurance, and other cost sharing—is more than the average U.S. household spends on gas in a year.

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About Americans

I know that this article at Bananenplanet is filled with generalizations, but many of them rang true to me. Thoughtful article that suggests that Americans need to look in the mirror. Here are some of the main points:

  • We Know Nothing About The Rest Of The World
  • The Quality of Life For The Average American Is Not That Great
  • The Rest Of The World Is Not A Slum-Ridden Shithole Compared To Us
  • We’re Paranoid
  • We’re Status-Obsessed And Seek Attention
  • We Are Very Unhealthy
  • We Mistake Comfort For Happiness

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Pay for Delay

Why is it that generic drug makers sometimes delay entering the market, sometimes long after the drug patent expires? This is another tale in corporatocracy, told by Alternet:

[I]magine you’re a big-time drug company. You want to keep competitors off the market as long as possible. Your move is to basically sue the pants off the generic drugmaker for copyright infringement, setting in motion a long and tortuous legal process. And these usually end with “pay-for-delay” deals. The brand-name drug company pays the generic manufacturer a cash settlement, and the generic manufacturer agrees to delay entry into the market for a number of years. In the case before the Supreme Court, the drug company paid $30 million a year to protect its $125 million annual profit in AndroGel, a testosterone supplement. It’s hard to see this as anything but bribery, designed to preserve a lucrative monopoly for the brand-name drug maker. In fact, this is what the Federal Trade Commission has argued for over a decade. They consider it a violation of antitrust law, arguing that the exchange of cash gives the generic manufacturer a share of future profits in the drug, specifically to prolong the monopoly. As SCOTUSBlog summarizes from the FTC’s court brief, in the regulator’s view, “Nothing in patent law … validates a system in which brand-name companies could buy off their would-be competitors.” Indeed, everyone wins with pay-for-delay but the consumer: the FTC estimates that the two dozen deals inked in 2012 alone cost drug patients $3.5 billion annually, with the brand-name and generic manufacturers splitting the ill-gotten profits.

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Time Magazine explores the destruction of American health care

Check out the feature article in this week's Time Magazine. It's called "Bitter Pill," and it's written by Steven Brill, a savvy insider. In addition to making me apprehensive that health insurance costs are about to spike upward due to Obamacare's lack of any meaningful price controls on health insurance, it gives an insider's look into the massively arbitrary pricing of health care services. In the absence of any competitive market, big hospitals (including the so-called non-profit hospitals) are freely allowed to concoct the prices they charge. They quietly maintain their made-up pricing on their non-public "chargemaster" price lists.

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