Many of the systems we take for granted are historical accidents. Either based on legacy systems hundreds of years old (higher education) or assembled in a short-term, ad hoc fashion (post-1940 national defense/ national security), these systems have expanded into vast patronage systems that are completely out of touch with 21st century needs, costs or realities.
The U.S. healthcare system was not planned; it is largely accidental.
One of the more remarkable characteristics of American life is our passive acceptance of systems that are so obviously completely insane. Yes, I refer to our healthcare system, a.k.a. sickcare because in America sickness is profitable and health is not, and healthcare profiteering that would be the envy of pirates and warlords everywhere is the norm.
What warlord wouldn’t jump on the opportunity to jack up the cost of a medication from $13.50 a tablet to $750 overnight, or as the article highlights, jack up the cost of an off-patent med from $1 a pill to $750 a pill in a few years?
This piratical pillaging is not an outlier–it’s the norm in America’s parasitic pharmaceutical industry:
As many of us have observed over the past few years, local governments in America are caught in the pincers of rapidly rising pension and healthcare costs and stagnant tax revenues. The only “fixes” that don’t alienate vested interests or tax-burdened voters are dramatic increases in junk fees, i.e. “fees for use,” and borrowing money by selling bonds.
That good health is insanely unprofitable was highlighted by a staggering statistic in the recent research paper The Concentration of Health Care Spending:
Three charts crystallize the healthcare dynamics that are dooming the U.S. economy. The first depicts the runaway growth of healthcare costs–a rapid expansion that is a permanent feature of U.S. healthcare, regardless of which party is in office or what reforms are instituted.
This expansion of costs has many drivers, most of which result from the system’s perverse incentives for fraud, overbilling, marginal treatments and defensive medicine.Technological and medical advances offer more options for treatment, and can push costs up–but advances can just as readily push costs down, too.
The primary drivers of rapidly increasing costs are:
Tagged with: defensive medicine
, marginal treatments
, perverse incentives
Either join the disruptors or prepare to be disrupted.
Disruptive technology is a tiresome cliche, as every Twitter/ AirBnB/ Uber/ Skype/etc. wannabe start-up declares itself disruptive. That the vast majority of self-congratulatory start-ups are over-hyped and derivative should not distract us from the larger reality that some technologies do in fact disrupt how things are done.
Fossil-fueled mechanization, for example, turned an overwhelmingly rural farming society into a highly urbanized services-dominated economy.
In the more recent past, CraigsList single-handedly turned the newspaper industry from an immensely profitable license to print money (via costly classified ads) to a struggling sector with an unclear future.
We are so brainwashed by centralized models of state authority that few can even imagine a system where the solution is not one centralized monstrosity ruled by a political/financial Aristocracy but a competing profusion of opt-in, transparent solutions.
Many readers ask me for solutions to the current arrangement’s many ills. Seeking solutions is a healthy and positive direction, for highlighting what’s broken is not only much easier than proposing solutions, it’s a dead-end. Pointing out what’s broken is only the first step in crafting solutions.
But I’ve noticed that what most people want is not a real solution–they simply want what’s easy, which means leaving the Status Quo in place but magically making it cheaper and more convenient for them. If the solution requires inconvenience, getting less, accepting more responsibility and making major trade-offs–then it can’t be a solution because politicos have overpromised for so many decades that people expect everything to get cheaper (for them, not the system) and easier (for them, not the system).
Tagged with: convenience
, financial Aristocracy
, pareto Economy
, practical solutions
, wrong unit size
Here’s a two-word summary of why the American healthcare system is fundamentally broken and cannot be fixed with policy tweaks: perverse incentives.
If you type sickcare in the custom search box on this site, you get 10+ pages of articles. I have covered healthcare/sickcare in depth for many years. I have many correspondents within the sector (doctors and nurses), and have paid the unsubsidized costs of insurance as an employer or as a self-employed worker for 30+ years.
Here are two charts and three stories of many I’ve published over the years:
The jobs report has little value if we don’t peer beneath the glossy veneer.
On the surface, last week’s jobs report was glossy good news: the U.S. economy added 288,000 non-farm jobs. Beneath the glossy veneer, however, the news wasn’t quite as good as advertised: full-time jobs declined by 523,000 and part-time jobs surged 840,000.
Courtesy of Zero Hedge, here’s a chart depicting the entire job market:
The problem is its own solution. Whether we try to stop the Status Quo, or let it stop, it WILL stop.
Longtime correspondent Eric A. has a new essay describing a key dynamic of the years ahead: Extortion and skimming create their own antidotes. As the costs of skimming, extortion and corruption reach new heights, the savings to be gained by bypassing the Status Quo systems also increase.
Eric’s point is that the incentives to escape the debt-serf plantation are rising in parallel with the skimming of the state-cartel Elites.
Here’s is Eric’s provocatively insightful essay:
Concerning the Middleman-Skimming Economy, I’m here to tell you, it’s not all bad!
The oppressive system you describe of graft, fraud, theft, and extortion creates its own antidote.
Sickcare/ObamaCare is fundamentally broken at every level.
The incremental nature of change makes it difficult for us to notice how systems that once worked well with modest costs have transmogrified into broken systems that cost a fortune. Exhibit # 1 is higher education: 40 years ago, four-year public universities were affordable and two-year community colleges were almost free. Now students have to borrow $1 trillion to pay for the exorbitant privilege of higher education.
Longtime correspondent Ishabaka (an M.D. with 30+ years experience in primary care and as an emergency room physician) responded to this article with an insider’s account of what happens when greed and cartels take over healthcare.After reading What’s wrong with American hospitals?, a scathing deconstruction of for-profit healthcare, Ishabaka submitted this commentary:
I could have told you what was wrong with our hospital system by 1989 – nobody would listen to me back then.