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Liya Marie's avatar

It wasn’t poorly written. He had an accurate sense of health care costs vs outcomes. The claim that health care doesn’t cost more in the US is false — bizarrely so.

ETA: bizarrely so because this is well established by economists. It’s not controversial. It’s characteristic of the American health care system as much as income inequality/massive wealth gap is characteristic of the American economy. Read an OECD report — this is the most bizarre claim to make in light of the data and I’m seeing the most bizarre backbends being done to defend it. Disposable income? Costs relative to income?? What on earth.

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Gurwinder's avatar

Please familiarize yourself with this topic before posting about it. A good place to start is here: https://randomcriticalanalysis.com/2020/02/13/its-still-not-the-health-care-prices-2017-edition/

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Liya Marie's avatar

Higher income countries procure goods more cheaply so this limits costs?? What on earth?

Have you seen the cost of a bandaid from the ER in the US? It doesn’t matter what the cost of procurement is. It’s marked up precisely because there is a private actor in the market who will theoretically reimburse for the care. What drives costs in the market has nothing to do with individual anything and everything to do with what an enormous insurance company will pay, which is precisely why the market is so warped in the United States.

I could go on but how is this worth anyone’s time? Whatever hairs you split, here’s the end result: millions of Americans had no access to care prior to the ACA. Millions of Americans still have no real access because you don’t pay for it once there; you must pay at every stage. And no matter the care they receive, Americans die sooner than everyone. That is a costly failure.

And what about the losses incurred by Americans in terms of the endless hours they spend wrangling with insurance companies and their Byzantine network system? Is that factored into the costs of healthcare in the US? No, so we’re all generally being very generous in our conventional cost assessments.

Is there someone out there who really REALLY wants to make the argument that there’s not something ABNORMAL about the outcomes of capitalism + health care in the only country that practices it?? The reason health care costs so much in the US is because it is a *for profit* industry, end of story.

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Liya Marie's avatar

I have familiarised myself with the comparative costs of healthcare from OECD reports. I have read countless such reports for my job. I have also lived, as an adult, in the United States and other OECD countries and have a good sense of how healthcare works in reality.

There is no way that you will convince me that somehow income is relevant to assessing costs (how is that relevant when the US healthcare system is 50/50 public/private?)* and not the fact that Americans pay for healthcare in 5 ways: copays, premiums, deductibles, taxes, and out of pocket expenses. The rest of us pay taxes only.

Cross country comparisons are difficult but economists do them all the time. I did them all the time, as a researcher. What is nonsense is claiming that a very commonplace, unremarkable finding that’s held for decades is suddenly magically incorrect because fancy data backflips and infinitely split hairs.

*yes, the US healthcare system is 50% public, paid for via taxes. That’s Medicare, Medicaid and VA/govt health care.

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Leave The World Behind's avatar

For someone who claims to “help people think better,” Gurwinder seems more interested in playing contrarian than engaging with the evidence. Leaning on RCA’s flawed analysis, which cherry-picks GDP and PPP metrics while ignoring obvious systemic issues like administrative waste (8% of U.S. GDP vs. 2% in the U.K.) and absurd pricing disparities ($1,119 for an MRI in the U.S. vs. $140 in Switzerland), feels more like rejecting the consensus for the sake of it. Telling critics to “read paragraph four” doesn’t exactly scream intellectual rigor—it feels like a dodge. If truth and clarity are the goals, it might be worth addressing why decades of research point to RCA’s claims being the real outlier.

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Liya Marie's avatar

It's the facile nature of the contrarianism that bothers me. It's the "decades of findings from professional economists who do comparative analyses all day every day are flawed because I read a few sketchy sources online." No, the burden of proof is on you. The burden of explanation is on you. Luigi Mangione wasn't saying anything out of the ordinary, nothing that isn't already widely recognized. And a few internet sources does not suffice to debunk anything, does not outweigh conventional practice despite its imperfections.

This is how misinformation works. Now a boatload of people can walk around making the claim that the US healthcare system is perfectly ordinary despite all evidence to the contrary. They won't go research it because they lack the ability, time, or interest. But someone on the internet is telling them what to think, so think it they will. Drives me nuts. If a student did this in the classroom, I'd fail them outright.

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Gurwinder's avatar

The consensus you speak of doesn't exist outside your echo-chamber.

And since you seem to think you're an expert on this topic, I'll point out that you didn't even know why higher income leads to higher prices. Income increases spending, which increases demand, which increases prices. It's why inflation exists. The fact that you don't even know this extremely basic economic concept (let alone the Baumol effect) shows that you have a lot of learning to do before you earn the right to opine with the confidence you display.

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Liya Marie's avatar

I'll take my echo chamber if it's from the OECD, thanks. You can take yours from the internet. One of those sources is policy relevant and it isn't yours.

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Gurwinder's avatar

Appeal to authority fallacy.

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Liya Marie's avatar

It's not a fallacy because the OECD is an authority. It performs the research with teams of economists. Your bro on the internet is not.

I'm also not engaging with the argument because it makes no sense. You're taking basically a pattern of economic development and applying it to explain costs in a healthcare system that is 50/50 private/public. The PRICE mechanism in a market is a function of supply and demand. Not interested in this – only pushing back so there's not a long thread of readers in clueless agreement.

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Gurwinder's avatar

Nowhere does your "authority" agree with you that greed is why US healthcare costs are high. You're completely out of your depth on this.

"Does the United States get value for what it spends? The answer is not clear. The United States does better on some international measures of health care quality, while not so well in others. In terms of outcomes, some mortality and morbidity measures are below average in the United States, although this can be due, to an extent, to factors outside the health system’s control."

https://www.oecd.org/content/dam/oecd/en/publications/reports/2022/09/understanding-differences-in-health-expenditure-between-the-united-states-and-oecd-countries_cafc404c/6f24c128-en.pdf

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Liya Marie's avatar

My point is that costs ARE high in the United States – far higher than the remaining OECD countries and only Switzerland comes close. Luigi Mangioni said the US has the most expensive healthcare system in the world. That was his point, too.

Your argument "debunked" this. Your point was that the US doesn't spend more on healthcare, costs aren't high, they're normal because income whatever yadda yadda yadda.

This point you're now making is "does the US get value for what it spends [which is much more than other OECD countries]?" And the answer from the OECD is "that's unclear." But the US still spends more. Even the title in the URL tells you that.

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Matt's avatar

I don't have the time to do a deep dive here, but color me skeptical. For one, my understanding is we spend something like double the OECD average of our GDP on health, as a percentage, which is opposite of what this analysis claims. Presumably for reasons related to that, literally every other comparative analysis I've ever seen of the US health economy concludes differently than this one.

In some contexts that statement might be less meaningful. But US health economics has been studied extensively for decades by economists from right to left, and economics is a field that rewards cranky contarians! It's a bad habit to believe an outlier study in that context exposes a hidden truth rather than just being wrong. Not to say it's definitely wrong without digging in. But very unlikely given what I've seen.

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Gurwinder's avatar

With respect, if you're not willing to read the full analysis, you shouldn't really be commenting on it. Your point about GDP shows you didn't read past the 4th paragraph. Further, the analysis explains precisely why previous analyses have been wrong.

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Leave The World Behind's avatar

Respectfully, the foundation of this analysis is flawed.

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Matt's avatar

I read the post. I meant I don't have time to do a deep dive comparison versus essentially all existing literature. Liya Marie called out some good points. The reason I referenced the percent of GDP was meant as a reference to the data back flips she's talking about. If we spend, total, double the percent of GDP of other rich countries, there has to be data back flips going on to make it look like we're almost perfectly on trend in every graph

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