Doctors have complained bitterly to me about the immense hassle and cost of dealing with the insurance companies. The typical medical practice has one or more employees who deal with this full time. (Look at all those people behind the glass windows. What are they doing? They aren't delivering medical care, that's for sure.) A common training course offered to people looking for part-time or work-from-home employment is to become medical coders. Those people look up the codes and apply them to any medical visit or procedure. Codes change all the time, and insurance companies commonly reject a large number of medical claims from doctors--not just from you or me.
Doctors have employees who spend all day filing and re-filing the claims and navigating their way through an immense sea of paperwork. But who pays for those extra employees--people who provide no direct patient services? You and me, with ever increasing bills, either from the doctors directly or from the insurance companies.
And let's not get started on the gouging big pharma does with meds. The profits are immense despite the costs of getting a new drug through the FDA. Yet many people die because they can't afford the meds that are priced absurdly high. Do you eat this week, or take this pill? That's what it comes down to for too many people.
It doesn't have to be this way. The U.S. could actually learn something from how other countries handle medical care instead of being pigheaded.
But, Lily, let's talk about big pharma. One thing that irritates me regarding pharmaceuticals is that most of us don't really understand how or why we in the US pay so much. Now, for the record, my views on whether we should ask the government to negotiate drug prices has evolved and I've decided that I think the trade-offs are worth it, at least for me and my family.
I'm loathed to link to the left's version of Breitbart, but surprisingly, Vox did have a rather even-handed explanation about why drugs are priced so much higher in the US.
https://www.vox.com/science-and-health/2016/11/30/12945756/prescription-drug-prices-explained There's a direct trade-off between innovation and access. The US has access to every drug approved by the FDA (Food & Drug Administration for non-US readers). That's not the case in much of the rest of the world, because national agencies determine and negotiate which drugs and at what prices they'll approve. Sometimes, they'll decide the benefit to cost isn't there and they'll deny even to negotiate the price - that drug is simply not available. An example of that in the UK is aimovig, a drug that treats chronic migraine sufferers. NICE decided to take a pass. They felt the benefits didn't line up with the costs.
If we changed our model in the US, it's silly to think that investors won't change their behavior. If drugs become less profitable, less money will flow into their research and development. To think otherwise is economic illiteracy.
Before we change the model, we really ought to ask ourselves, what would be the global effect if the US started negotiating drug prices. Right now, global pharmaceutical companies can and do negotiate drug prices in the rest of the world that are oftentimes below the cost of the drug (and yes, I'm counting the cost of R&D in that equation), because the pharmaceutical company knows they will recoup their R&D budget in the US market. All they need to do in the rest of the world is make more than the production cost (which may exclude R&D).
But what if that changed? What if the US negotiated prices with the pharmaceutical companies? First, we'd get cheaper drugs. Second, globally, drug manufacturing would become less profitable. Then, R&D budgets would fall. And the pace of new drugs entering the global marketplace would slow, as there would be fewer investors willing to risk their investment in a lower profit industry. This might have the effect of changing drug manufacturers' behaviors when it comes to negotiating prices in places like the UK and Australia. Today, pharma knows they'll clean up in the US market. If that changes, then they have less incentive to allow a drug to sell in the international marketplace below certain price points. Maybe other countries would pony up more money for drugs their people need, maybe they wouldn't.
While I'm uncertain if the over-all benefits outweigh the costs of changing the US model, it would work for me and my family as I suspect it would benefit millions of other families in the US. And if it comes with a reduction in new drugs entering the market or if it adversely affects other marketplaces outside the US, I'm ok with that.