Why conventional wisdom on health care is wrong (a primer) (2020)

Scope & Measurement of “Health Spending”

• Several comments note ambiguity in what “health spending” covers: direct payments to providers vs. total outlays including insurer overhead and PBM margins.
• One commenter traces the paper’s methodology to OECD work using a “quasi-price” basket of goods/services, not simply actual cash flows. This explains some counter‑intuitive results and makes comparisons tricky.

US vs Other Countries: Costs, Outcomes, and Government Role

• Many argue US healthcare is vastly more expensive than in the UK/Europe/Canada/Australia, citing lower out‑of‑pocket costs, predictable pricing, and absence of medical bankruptcy abroad.
• Others stress that US governments already spend per capita sums comparable to European systems, despite lacking true universal coverage.
• Some see the US as not uniquely inefficient once income is controlled for, but agree outcomes are mediocre and that the system is fragmented and incentive‑misaligned.
• Trade‑offs in more socialized systems are highlighted: lower provider wages, rationing, queues, QALY-based decisions, and slower innovation.

Insurance, Administration, and Market Structure

• Recurrent theme: huge administrative overhead—employer HR, billing staff, doctors’ time fighting insurers—viewed as pure waste and a drag on the wider economy.
• Others respond that some insurer behavior (claim denials, rate negotiation) restrains provider costs, and that even eliminating profits would barely dent total spending.
• Debate over non‑profit insurers: technically low profit margins, but skepticism about executive pay, complex structures, and “for‑profit nonprofits.”
• Several note new US price-transparency rules, but many say practical out‑of‑pocket prices are still opaque and highly variable.

Drug Prices, Patents, and R&D Subsidy Argument

• Thread extensively debates whether high US prices “subsidize” global drug innovation.
• One side: US overpays, others free‑ride via price controls; reducing US prices would slow innovation, especially for rare diseases.
• Other side: no strong evidence innovation would collapse; much basic research is publicly funded; marketing often exceeds R&D; many generics are cheap elsewhere but overpriced in the US.
• Suggested reforms include: government licensing with lump‑sum fees, tying US prices to lowest foreign prices, stricter anti‑gouging rules, or outright public production of essential drugs. Concerns raised about game theory, under‑/over‑paying, and monopsony power.

Lifestyle, Demand, and Outcomes

• Several align with the article’s point that income and demand drive spending, and that US outcomes are hurt by obesity, car‑centric lifestyles, and limited prevention.
• Others counter that system design still matters for infant mortality, preventable deaths, and access to primary/preventive care.

Medical Bankruptcy & Financial Risk

• Strong disagreement on how often medical bills cause bankruptcy: figures quoted range from ~4% (hospitalization‑focused study) to ~60% (widely-cited but criticized work).
• Some argue the low figure is methodological (narrow definition, single state); others say many bankruptcies have multiple causes and medical debts are often one component.

Supply Constraints and Professional Cartels

• Multiple comments blame high US/Canadian costs partly on tight caps on residency slots and medical‑school output, historically supported by professional organizations and federal funding limits.
• Pushback warns that simply “flooding the market” risks quality collapse, citing countries where rapid expansion of medical schools led to incompetent graduates.

Personal Experiences & System Friction

• Numerous anecdotes contrast fast, cheap, predictable care abroad (Portugal, Norway, Thailand, Switzerland) with US stories of long ER waits, surprise bills, conflicting prices, and perverse incentives (cheaper to self‑pay than use insurance).
• Some note that even in single‑payer systems, clinicians still spend significant time on documentation and bureaucracy; the difference is magnitude, not existence.

Normative Visions & Policy Directions

• Competing visions emerge:
  • Expand public or single‑payer coverage to eliminate admin waste, leverage monopsony power, and treat healthcare as a right.
  • Or deregulate, reduce insurance’s scope, allow more price differentiation, and foster new care delivery models (e.g., subscription chronic‑care clinics).
• Many emphasize that any serious cost reduction must confront politically sensitive levers: provider pay, rationing, drug/device pricing, and lifestyle determinants—not just “greedy insurers.”