Aetna CEO Threatened Obamacare Pullout If Feds Opposed Humana Merger

Can anyone succinctly explain the benefits of having a market for private health insurance companies, rather than a single provider of health insurance (government, aka "public option")? Can a capitalist case be made for their existence? Does the lack of a large private insurance market in countries with government-provided health insurance cause lots of inefficiencies and waste?

It's hard to tell if there are inefficiencies and waste or if health care is just simply really expensive.

Health care is done by the Provinces in Canada, with transfers from the Federal Government to help out. The most recent Alberta budget[0] puts the cost of health care at about $20B. This represents approximately 40% of Alberta government spending.

Is that due to waste or inefficiencies? I honestly have no idea. I just know that it's a big number.

Another thing to keep in mind is that, at least in Canada, the government provides some base amount of health services, but there are still other things that aren't covered. In Alberta, someone might go to the ER for a severe asthma attack and that's covered, but the prescriptions to keep the asthma under control are paid for out of pocket or from a benefit plan (which could be an individual plan or through an employer). Similarly, dental is not covered, but may be covered under a benefit plan.

[0] http://finance.alberta.ca/publications/budget/budget2016/fis...

I would really like to see a breakdown of the actual costs to provide a given service. Take something simple like removing an appendix or gall bladder. You have one surgeon, one or two surgical assistants (typically med students / interns), plus a couple nursing staff, and the anesthesiologist, for about an hour. 6 people, assume 200K per year, that's $100 per hour, so $600 in people salaries. (Throw in another couple hours total for prep time, consultation, planning, etc, still you are talking less than 2k).

Then you have amortization of the equipment and operating room, and some fraction of the hospital support staff during the prep and recovery stages. But even with that I still don't see where the $80,000 for the surgery cost comes from.

The anesthesiologist alone will be $5k.

They are the person most able to kill you when they screw up, so a significant portion of that bill is insurance. They also make $300-500k.

Also recovery room or ICU time is very expensive -- something like $1000/hr in some cases.

That type of procedure (gall bladder) will cost something like $15-20k.

When I had a spinal fusion, it was a 4-5 hour procedure involving a neurosurgeon, his PA, an anesthesiologist and his nurse, and 4-5 others. That procedure cost ~ $125k.

Aren't healthcare list prices in the US really really distorted and nonsensical, due to decades of messed up incentives between hospitals and insurers?

Cannot speak for the cause, but the prices are distorted. I was taken to ER a couple of months ago and x-ray of chest cost $3500 and CT of chest $5500. The equivalent prices at the private sector of my home country would have been $70 and $120 and I could have gotten those done just as quickly as in ER in US.

In most places in the US, you can't even get list prices. Calling up providers for quotes gets you hung up on.

Singapore, which has a significant market portion to their health care industry, mandates posting of prices.