One Frightening Reason Why Market-based Healthcare is a Poor Choice

[Vampyr]

If the socialized medical system just means that the government pays the bills, that doesn't change the incentives of the medical institutions themselves. The government also needs to be able to control the prices that the institutions charge, or set the way they're paid (e.g. by results, not by treatments, or perhaps just some flat rates that all the instututions receive), or go all the way and nationalize the entire medical industry.

 

I am not sure what you are trying to say. Doctors here normally receive a salary; in some cases, I think, an hourly rate. Drug prices are negotiated to a low rate and then subsidised for the patient, and drug companies face the real risk of a drug not being deemed value for money, in which case it will not be purchased at all. Name-brand drugs are never, as far as I know, prescribed when a generic is available.

 

I don't know what happens when hospitals somehow end up with more money than they need. I doubt, however, that they are allowed to just keep the money and spend it as they wish.

 

How are the incentives in this system the same as in a system dominated by private medicine mediated by insurance companies?

[barmar]

Maybe the problem is that the American medical industry is so huge that it dominates the drug companies' priorities. Obamacare didn't change the underlying way that the medical industrial complex is financed, it mostly just changed the insurance industry (mandating various types of coverage) and added government subsidies.

[billw55]

... The price in London is about 15% of the US cost. This disparity probably is due to the cut insurance companies usually get in the US.

I have heard of this before. The appearance is that the drug companies are price-gouging American consumers. Or at least, that American "insurance" companies are doing a drastically worse job negotiating prices. I doubt such negotiations are in good faith.

 

[Vampyr]

Or at least, that American "insurance" companies are doing a drastically worse job negotiating prices.

 

Well, they don't have much incentive to do so. Our prescriptions cost £7.80 each, so the incentive for the NHS to reduce costs is huge. And I expect that there is a knock-on effect with privately-written prescriptions and of course with doctors, procedures etc, since they have to compete with "free".

 

By the way, in the US, does insurance always cover prescriptions?

[mike777]

Well, they don't have much incentive to do so. Our prescriptions cost £7.80 each, so the incentive for the NHS to reduce costs is huge. And I expect that there is a knock-on effect with privately-written prescriptions and of course with doctors, procedures etc, since they have to compete with "free".

 

By the way, in the US, does insurance always cover prescriptions?

 

I have doubts that your prescriptions cost only 7,80E

 

What concerns me in your post is your lack of:

1) telling us what the true cost is?

2) who pays this total true cost?

3) how this true total cost is computed and by who?

 

to claim all drugs have the exact same cost is of course nonsense.

 

 

I understand you may not pay all the costs, hence why so many treat NHS as Holy. You get others to pay for you.

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As Barmar suggests the total medical industry is huge, roughly 20% or more of USA!

Not just your local family doc.

[helene_t]

I have doubts that your prescriptions cost only 7,80E

 

What concerns me in your post is your lack of:

1) telling us what the true cost is?

2) who pays this total true cost?

3) how this true total cost is computed and by who?

Come on Mike, you know that Stephanie doesn't claim that the real costs are 7.80. Her point is that the patient pays 7,80 regardless of the wholesale price, so any reduction in wholesale price which NHS might be able to negotiate would go into the pocket of NHS. This is different from countries like USA and the Netherlands where the caregivers can just prescribe expensive medicine without worying about the costs since it will be the insurance company that pays.

[Zelandakh]

This is different from countries like USA and the Netherlands where the caregivers can just prescribe expensive medicine without worying about the costs since it will be the insurance company that pays.

Which is why the NHS has a much higher uptake on generics than the USA. The use of generics whenever one is available provides a massive saving.

[billw55]

Well, they don't have much incentive to do so. Our prescriptions cost £7.80 each, so the incentive for the NHS to reduce costs is huge.

Little snippets like these really speak volumes about the difference in how government operates across the pond, or at least how people feel about government. In USA, it seems like public agencies/programs rarely give a rat's butt about cost. It's just other people's money. What incentive? More down the drain, who cares? But you seem to have a different (and better) attitude over there.

 

 

By the way, in the US, does insurance always cover prescriptions?

Most plans have at least partial prescription coverage, either included or as an optional add-on (+cost of course).

 

 

[barmar]

Which is why the NHS has a much higher uptake on generics than the USA. The use of generics whenever one is available provides a massive saving.

I think most prescription drug plans in the US require the use of generics, unless the doctor specifically prescribes otherwise.

[Zelandakh]

I think most prescription drug plans in the US require the use of generics, unless the doctor specifically prescribes otherwise.

The NHS withdrew the doctors' right to prescribe otherwise a long time ago (under Thatcher I think). It was controversial at the time but has been accepted as having been the right decision. A fair bit of mathematical modeling research has been done to try and provide a framework for the decisions on which treatments to allow or not allow a doctor to prescribe but these are still amongst the most difficult to be taken anywhere and often create controversy.

[helene_t]

The hrt I use is prescribed as specifics. In the Netherlands also but there I have an incentive to ask the pharmacist for a cheaper alternative because it saves me money. Same in Denmark. So in this case the dutch and Danish systems trump nhs. Not that it matters much since the price difference is small.

 

This is a bordeline case since unlike tablets, transdermal patches differ in user convenience even if the active ingredient is the same. Presumably nhs doesn't consider them equivalent.