Pharmaceuticals are only about 10% of all healthcare costs [1].
The vast majority of healthcare spending goes to hospitals and doctors, yet the political environment hyper focuses on drugmakers. Why isn't there a larger focus on reducing the costs of hospitals and healthcare professionals?
Because every time someone gets around to focusing on anything, there's a loud chorus of people who thinks the focus should be elsewhere. The fact of democratic policy making is that it's hugely inefficient, and is rarely able to focus on anything at all, so the only way forward if you want to get anything done is to ride the wave of opportunity when it presents itself.
I agree, why is it that doctors make such high salaries? Is it because of the long and relatively difficult education and training that they have to go through? That is definitely part of it but in my opinion those salaries (which in many countries are publicly funded) could be reduced drastically by training more doctors.
Professional societies have a strong interest in artificially keeping the supply of qualified doctors low in order to keep salaries high. University admissions for medical school continue to be extraordinarily low in proportion to the number of applicants yet there are still shortages in many parts of the country.
If you paid doctors less, there's no reward for spending your entire 20's and early 30s in training, already earning almost nothing. Nobody, especially nobody talented, will do it.
It's already probably not worth it from a purely financial perspective, when you consider the options would-be doctors have (they are among the highest performing students already -- they could easily be lawyers, professors, engineers, etc).
The real growth in medical costs are from administrative overhead and the vast new amounts of paperwork that doctors have to spend their time shuffling.
If doctors spent 80% of their time in patient interaction or actual diagnosis, there would not be a perceived doctor shortage. Instead, it's 70% paperwork and filling out forms to check the right regulatory boxes. Increasing productivity by culling the paperwork and regulatory bloat will be vastly more productive than pumping out more low-quality doctors.
In plenty of other countries doctors are paid substantially less and the quality of healthcare is better. I don't think it's impossible for the U.S. to do what everyone else is already doing.
The statistics in similar free market countries (labor, not health care) are curious. Interested in any links you have, but this NYT blog post [1] seems to show that, GDP-per-capita normalized (which seems reasonable; second chart), there isn't that large of a divergence between what I would assume would be comparable nations.
Nurses make 0.9-1.4x, GPs 1.7-4.1x, and specialists 1.7-7.6x GDPpc.
Certainly a range, but nothing jumps out at me as "the US is an order of magnitude outlier."
I'd be fascinated to make a further breakdown of these numbers in terms of style of country's health care system, to see what correlations drop out though...
It should be possible to train doctors faster tho. Asking them to go through four additional years of undergraduate program before they study medicine just adds years to it.
Something like that, as long as they know how to perform the specific procedure and how to deal with all the things that can go wrong.
The coding equivalent of doctors training would be a) taking a general bachelor's degree b) taking a 4 year computer science degree c) specific training in programming in 24 different languages and 400 frameworks d) get a job programming in Java and eventually forgetting most of the other stuff.
I think there would be a lot of merit to a workshop + 1 certified engineer method. Allow a medical facility to employ less-generally trained specialists (e.g. nurse practitioners) to perform procedures, as long as they have one generalist with deeper knowledge on site during procedures and who signs off on courses of treatment.
I realize this is somewhat the resident model, but it seems like there's room to expand that, decrease costs, and provide a job opportunity for people who are fine accepting a lower salary and stopping their medical training at that point.
Having had a few friends go through medical school, I absolutely have compassion for their side of the equation. They go into extensive debt (yes, usually with good loan terms) on the promise of "if you make it, then you'll be able to repay this / have the debt forgiven." But it doesn't seem like there's any "I don't want to go all the way" escape route.
>If you paid doctors less, there's no reward for spending your entire 20's and early 30s in training, already earning almost nothing. Nobody, especially nobody talented, will do it.
I don't think that's true. If you look at admissions to even second rate schools there are many times more students that there are spots. Students with grade point averages in the high nineties are being turned down and others are not even attempting it because the odds are so slim. Medicine as a profession is very prestigious because it carries a strong association with helping people and requiring high intelligence. Reducing wages might actually increase the quality of doctors because you might tempt some into other professions who are interested in it mostly for financial reasons and bring in some other people who are very passionate but might not have done it because of the very tough competition.
Dean Baker makes the important point that while our politicians are happy to support the outsourcing of manufacturing, they're in favor of protectionism when it comes to doctors and medicine[1]. This is part of what drives up costs for the average American.
In the US a lot of non-specialty doctors make around $150-$200k, meaning they're in line with some snot-nosed kid with a bachelor's in CS and an offer from Google. Becoming a doctor isn't the end-all it used to be unless you really love it and/or are really good.
Plus, you know the whole 4 years of graduate work, 3 tiers of USMLE testing, 3 years of residency at what works out to be less than what you can make at Starbucks, a few more as a fellow before you can even start practicing. Even at the top end (cardiologists, anesthesiologists, neurologists), you're going to pretty much salary cap at around $750k pre-tax. There is a lot of waste in medicine, but the salary of doctors is pretty fairly priced.
Imagine if cardiologists all of a sudden went 'value-based free market' in their pricing. With all the retiring boomers in their waning years, I could very easily see 6 hours of labor for a staff of ~6-8 in the OR performing a bypass being billed at $100k.
Most countries have doctors skip undergrad which makes a huge difference. The US problem is people become doctors late in life and retire relatively soon after that. In UK Medical school might be 4-6 years, but saving 4+ up front and possibly a 'gap' year is huge. No only do people work longer, but they also have fewer years of compounding interest effing them over. Net result is you simply need around 20% fewer people to go though medical school.
Most (all?) countries outside the US seem to agree that roughly one year of undergrad maths/physics/chemistry blended into their med school program is enough.
None? I really, really don't care if the guy operating on my appendix can calculate torque. I care that he knows a lot about appendixes and has a steady hand.
Society doesn't seem to take issue with screwing over kids who go to law-school (outside the top 3) with asinine levels of debt and low salaries. All salaries should be subject to market forces.
> Bad lawyers also don't kill people as frequently as bad doctors.
You mean other than death row cases and suits to pay for life-saving treatments and suits that affect product safety and prosecutors who fail to convict violent recidivists and ... ?
About three quarters of a million people die each year just from HAI's... never mind all of the other problems, pain, expense, and poor outcomes. Lawyers do a lot of harm, but doctors are have unique access, and it would seem, shitty hygiene.
Meanwhile lawyers operate at scale. How many people do you estimate would have died if tobacco companies had won their challenge to laws prohibiting them from advertising to children? And that's the damage from one lawyer losing one case.
Not to pick on you, but your statement reflects a prejudice that many professions -- including doctors, but also lawyers, professional athletes, even hitmen -- are far too happy to exploit.
Worth noting this was "Issued by Global Policy & International Public Affairs, Pfizer Inc." (a large pharmaceuticals company) in October 2015 and there is an odd phrase in the footer that reads "Do Not Detail."
"Detail", in pharma parlance, refers to making sales presentations to physicians. The people who do this were once called "detail men".[1] This has declined somewhat now that pharma can advertise prescription drugs directly to patients.
Also, this is arguably the most corrupt aspect of medical pricing. Putting these sociopathic predators under the thumb of good governance satisfies a moral as well as an economic desire.
I'm not disputing the 10% number (though I don't know what all it includes - does it include drug delivery systems, like what is under discussion in OP's article?). I'm disputing the overall conclusion in that paper that "drug costs aren't really worth focusing on." I also dispute the assertion that other areas of health care aren't also being focused on for cost insanity. 10% is still a huge number, and if you happen to be one of the unlucky souls dependent on a medicine that goes up in price by many multiples it's a gigantic deal to you.
What do you mean by "results doctors by themselves can achieve"? Do you just mean to exclude drugs?
Or are you somehow also excluding IVF, MRIs, CTs, LASIK, stents, DNA sequencing, laparoscopic surgery, newborn screening, liposuction, and transplants?
That's right. New procedures are part of what professionals do, and knowing which one to apply each time is their trade. You can't buy that in a bottle.
One reason would be if pharma has a sufficiently larger margin than hospitals and doctors. It might be the case that there's more to save in that 10% than the rest of the 90% (especially when the cost of implementing change is considered).
>Why isn't there a larger focus on reducing the costs of hospitals and healthcare professionals?
Because that's exactly the wrong end to save money with health care. Drugs work with an economy of scale, highly specialized jobs, like medical doctors and the myriad of others, don't scale like that.
I'd rather save money buying generic drugs, than saving money by visiting an inexperienced/barely educated medical doctor.
Not to mention: Dumping wages isn't a good long-term approach to any sector, least of all health care sector.
When Edward Burger Flipper has a bad day, due to low pay and crappy working conditions, the worst that can happen to you as a customer is you get some stomach troubles from badly prepared food. If a doctor or nurse has a bad day, due to low pay and crappy working conditions, it may cost you your life.
Which is fine, honestly. I don't actually pay money for either of those (Obviously I pay with data and things). They also aren't something that is going to save my life in the same way as insulin does for a diabetic or an epi pen does for those allergic enough to need one.
I don't actually care what percentage profit the drug companies make so long as the end user can both access the medication and clearly afford to pay for them.
> They also aren't something that is going to save my life in the same way as insulin does for a diabetic or an epi pen does for those allergic enough to need one.
Which is more reason for those companies to be profitable, not less. The bright kid choosing between making $200k straight out of college peddling advertising or entertainment and making that much mid-career with a bio-chem PhD is willing to take a little bit of a haircut to work on socially-valuable things, but probably not that much of one.
> I don't actually care what percentage profit the drug companies make so long as the end user can both access the medication and clearly afford to pay for them.
That's a failure of the government's healthcare programs, not drug companies' pricing methods.
I'd agree they should be more profitable, but like most things, profit doesn't follow good works.
The point was more that it doesn't matter that entertainment companies make a higher profit because that profit doesn't generally put folks lives in danger. Unless the government reorganizing health care to provide more straightforward profits, upping the profits hurts folks because they are more likely to feel the increase. Hence the last statement: The important part is that the end folks get access.
And you are right, that is the government's fault. It isn't just healthcare programs, however. They could go different routes to reimburse drug companies for r&d costs, for example. Sure, the money would still come from taxes, but hopefully(!) it'd be more transparent with some of these things.
while i sympathize with the implication that facebook and google are not socially valuable, it's important to note that those advertising engineers help finance free worldwide communication, self-driving cars, and smartphones.
To add to that, the percentage spent on drugs is a bit of a meaningless number.
Let's say a magic pill was produced that completely prevented heart attacks. Drug spending would go up and all other costs would dramatically decrease (hospital stay, surgeries, etc).
Suddenly the cost of drugs is 20% and everything else is 80%. That would be a good thing, no?
The vast majority of healthcare spending goes to hospitals and doctors, yet the political environment hyper focuses on drugmakers. Why isn't there a larger focus on reducing the costs of hospitals and healthcare professionals?
[1] http://www.pfizer.com/files/about/Position-Role-of-Pharmaceu...