<story><title>YC Research: Universal Healthcare</title><url>https://blog.ycombinator.com/yc-research-universal-healthcare/</url></story><parent_chain><item><author>beambot</author><text>What is preventing legislation that simply opens borders &amp;#x2F; trade for filling prescriptions?</text></item><item><author>sbierwagen</author><text>&lt;p&gt;&lt;pre&gt;&lt;code&gt;  Medicare Part D plans are run by private insurers and 
  they certainly do negotiate on price.
&lt;/code&gt;&lt;/pre&gt;
Why is a third party negotiating for Medicare, rather than Medicare negotiating directly? Because they&amp;#x27;re smaller, and have less leverage.&lt;p&gt;&lt;pre&gt;&lt;code&gt;  physician administered drugs are paid for at a rate 
  that is the average of what private payers pay.
&lt;/code&gt;&lt;/pre&gt;
Why is a third party negotiating for Medicare, rather than Medicare negotiating directly? Because they&amp;#x27;re smaller, and have less leverage.&lt;p&gt;From &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.cnn.com&amp;#x2F;2015&amp;#x2F;09&amp;#x2F;28&amp;#x2F;health&amp;#x2F;us-pays-more-for-drugs&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.cnn.com&amp;#x2F;2015&amp;#x2F;09&amp;#x2F;28&amp;#x2F;health&amp;#x2F;us-pays-more-for-drugs&amp;#x2F;&lt;/a&gt;&lt;p&gt;-- Gleevec (a cancer treatment): $6,214 (per month&amp;#x2F;per customer) in the United States, compared to $1,141 in Canada and $2,697 in England.&lt;p&gt;-- Humira (for rheumatoid arthritis): $2,246 in the United States, compared to $881 in Switzerland and $1,102 in England.&lt;p&gt;-- Cymbalta (for depression): $194 in the United States, compared to $46 in England and $52 in the Netherlands. In fact, there is also a generic version of Cymbalta so these prices reflect having a cheaper alternative.&lt;p&gt;Some molecule. Different price.</text></item><item><author>refurb</author><text>That&amp;#x27;s a vast over simplification of the issue and ignores issues around implementation.&lt;p&gt;First off, Medicare Part D plans are run by private insurers and they certainly do negotiate on price.  In fact, they tend to get better prices than commercial plans.  Those savings are used to compete for Medicare dollars to cover those patients (i.e. savings are passed on to Medicare).&lt;p&gt;Second, physician administered drugs are paid for at a rate that is the average of what private payers pay.  So no negotiation, rather a piggybacking on discounts to private insurers.&lt;p&gt;Finally, if you roll in the 340B discount (23% minimum), Medicare is getting a pretty good deal on drugs.&lt;p&gt;I would argue that unless Medicare threatens to NOT cover some drugs, it won&amp;#x27;t reduce costs one bit.  Currently there are a number of protected classes where Medicare HAS to cover those drugs.  That needs to be fixed first.&lt;p&gt;If you don&amp;#x27;t believe me, look at the CBO estimate of savings if Medicare is allowed to negotiate.  Their findings were &amp;quot;minimal savings&amp;quot;.[1]&lt;p&gt;&lt;i&gt;CBO estimates that enacting S. 3 would have a negligible effect on direct spending and would result in spending from appropriated funds of $2 million in 2008 and less than $500,000 annually in subsequent years. Enacting S. 3 would have no effect on revenues.&lt;/i&gt;&lt;p&gt;[1]&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.cbo.gov&amp;#x2F;sites&amp;#x2F;default&amp;#x2F;files&amp;#x2F;110th-congress-2007-2008&amp;#x2F;costestimate&amp;#x2F;s30.pdf&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.cbo.gov&amp;#x2F;sites&amp;#x2F;default&amp;#x2F;files&amp;#x2F;110th-congress-2007-...&lt;/a&gt;</text></item><item><author>warcher</author><text>In the united states we can&amp;#x27;t successfully implement &lt;i&gt;negotiation on drug prices for MediCare&lt;/i&gt;.  They literally can&amp;#x27;t negotiate with their suppliers.  By law.&lt;p&gt;Anybody thinking software is going to solve that is way in a bubble.&lt;p&gt;&lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;healthaffairs.org&amp;#x2F;blog&amp;#x2F;2016&amp;#x2F;09&amp;#x2F;19&amp;#x2F;the-politics-of-medicare-and-drug-price-negotiation&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;healthaffairs.org&amp;#x2F;blog&amp;#x2F;2016&amp;#x2F;09&amp;#x2F;19&amp;#x2F;the-politics-of-med...&lt;/a&gt;</text></item><item><author>TuringNYC</author><text>(Full-time co-founder of a healthcare startup here): W&amp;#x2F;r&amp;#x2F;t the US specifically: it seems there is no shortage of inefficiencies and obvious solutions to the inefficiencies in the US healthcare system.  To me, the real problem seems to be a system that has almost diabolically evolved to create competing interests that deadlock all sides into a sub-optimal solution.  Specifically-- patients, payers, physicians, pharma, facilities and insurers almost all have indirect but competing interests much like the Dining Philosopher&amp;#x27;s problem we&amp;#x27;re familiar with in Computer Science.&lt;p&gt;I&amp;#x27;m not sure what the solution is short of a total swamp draining, but our startup went overseas to develop&amp;#x2F;trial our product in a country with a single payer system.  Not perfect, but much more amenable to finding efficiencies.</text></item></parent_chain><comment><author>JacobJans</author><text>This ammendment almost made it to the floor:&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.congress.gov&amp;#x2F;amendment&amp;#x2F;115th-congress&amp;#x2F;senate-amendment&amp;#x2F;178&amp;#x2F;actions&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.congress.gov&amp;#x2F;amendment&amp;#x2F;115th-congress&amp;#x2F;senate-ame...&lt;/a&gt;&lt;p&gt;You can see who voted for &amp;#x2F; against it:
&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.congress.gov&amp;#x2F;amendment&amp;#x2F;115th-congress&amp;#x2F;senate-amendment&amp;#x2F;178&amp;#x2F;actions&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.congress.gov&amp;#x2F;amendment&amp;#x2F;115th-congress&amp;#x2F;senate-ame...&lt;/a&gt;</text></comment>
<story><title>YC Research: Universal Healthcare</title><url>https://blog.ycombinator.com/yc-research-universal-healthcare/</url></story><parent_chain><item><author>beambot</author><text>What is preventing legislation that simply opens borders &amp;#x2F; trade for filling prescriptions?</text></item><item><author>sbierwagen</author><text>&lt;p&gt;&lt;pre&gt;&lt;code&gt;  Medicare Part D plans are run by private insurers and 
  they certainly do negotiate on price.
&lt;/code&gt;&lt;/pre&gt;
Why is a third party negotiating for Medicare, rather than Medicare negotiating directly? Because they&amp;#x27;re smaller, and have less leverage.&lt;p&gt;&lt;pre&gt;&lt;code&gt;  physician administered drugs are paid for at a rate 
  that is the average of what private payers pay.
&lt;/code&gt;&lt;/pre&gt;
Why is a third party negotiating for Medicare, rather than Medicare negotiating directly? Because they&amp;#x27;re smaller, and have less leverage.&lt;p&gt;From &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.cnn.com&amp;#x2F;2015&amp;#x2F;09&amp;#x2F;28&amp;#x2F;health&amp;#x2F;us-pays-more-for-drugs&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.cnn.com&amp;#x2F;2015&amp;#x2F;09&amp;#x2F;28&amp;#x2F;health&amp;#x2F;us-pays-more-for-drugs&amp;#x2F;&lt;/a&gt;&lt;p&gt;-- Gleevec (a cancer treatment): $6,214 (per month&amp;#x2F;per customer) in the United States, compared to $1,141 in Canada and $2,697 in England.&lt;p&gt;-- Humira (for rheumatoid arthritis): $2,246 in the United States, compared to $881 in Switzerland and $1,102 in England.&lt;p&gt;-- Cymbalta (for depression): $194 in the United States, compared to $46 in England and $52 in the Netherlands. In fact, there is also a generic version of Cymbalta so these prices reflect having a cheaper alternative.&lt;p&gt;Some molecule. Different price.</text></item><item><author>refurb</author><text>That&amp;#x27;s a vast over simplification of the issue and ignores issues around implementation.&lt;p&gt;First off, Medicare Part D plans are run by private insurers and they certainly do negotiate on price.  In fact, they tend to get better prices than commercial plans.  Those savings are used to compete for Medicare dollars to cover those patients (i.e. savings are passed on to Medicare).&lt;p&gt;Second, physician administered drugs are paid for at a rate that is the average of what private payers pay.  So no negotiation, rather a piggybacking on discounts to private insurers.&lt;p&gt;Finally, if you roll in the 340B discount (23% minimum), Medicare is getting a pretty good deal on drugs.&lt;p&gt;I would argue that unless Medicare threatens to NOT cover some drugs, it won&amp;#x27;t reduce costs one bit.  Currently there are a number of protected classes where Medicare HAS to cover those drugs.  That needs to be fixed first.&lt;p&gt;If you don&amp;#x27;t believe me, look at the CBO estimate of savings if Medicare is allowed to negotiate.  Their findings were &amp;quot;minimal savings&amp;quot;.[1]&lt;p&gt;&lt;i&gt;CBO estimates that enacting S. 3 would have a negligible effect on direct spending and would result in spending from appropriated funds of $2 million in 2008 and less than $500,000 annually in subsequent years. Enacting S. 3 would have no effect on revenues.&lt;/i&gt;&lt;p&gt;[1]&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.cbo.gov&amp;#x2F;sites&amp;#x2F;default&amp;#x2F;files&amp;#x2F;110th-congress-2007-2008&amp;#x2F;costestimate&amp;#x2F;s30.pdf&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.cbo.gov&amp;#x2F;sites&amp;#x2F;default&amp;#x2F;files&amp;#x2F;110th-congress-2007-...&lt;/a&gt;</text></item><item><author>warcher</author><text>In the united states we can&amp;#x27;t successfully implement &lt;i&gt;negotiation on drug prices for MediCare&lt;/i&gt;.  They literally can&amp;#x27;t negotiate with their suppliers.  By law.&lt;p&gt;Anybody thinking software is going to solve that is way in a bubble.&lt;p&gt;&lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;healthaffairs.org&amp;#x2F;blog&amp;#x2F;2016&amp;#x2F;09&amp;#x2F;19&amp;#x2F;the-politics-of-medicare-and-drug-price-negotiation&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;healthaffairs.org&amp;#x2F;blog&amp;#x2F;2016&amp;#x2F;09&amp;#x2F;19&amp;#x2F;the-politics-of-med...&lt;/a&gt;</text></item><item><author>TuringNYC</author><text>(Full-time co-founder of a healthcare startup here): W&amp;#x2F;r&amp;#x2F;t the US specifically: it seems there is no shortage of inefficiencies and obvious solutions to the inefficiencies in the US healthcare system.  To me, the real problem seems to be a system that has almost diabolically evolved to create competing interests that deadlock all sides into a sub-optimal solution.  Specifically-- patients, payers, physicians, pharma, facilities and insurers almost all have indirect but competing interests much like the Dining Philosopher&amp;#x27;s problem we&amp;#x27;re familiar with in Computer Science.&lt;p&gt;I&amp;#x27;m not sure what the solution is short of a total swamp draining, but our startup went overseas to develop&amp;#x2F;trial our product in a country with a single payer system.  Not perfect, but much more amenable to finding efficiencies.</text></item></parent_chain><comment><author>edblarney</author><text>&amp;quot;What is preventing legislation that simply opens borders &amp;#x2F; trade for filling prescriptions?&amp;quot;&lt;p&gt;US suppliers sell to Canada at a different price than they sell in the US.&lt;p&gt;If &amp;#x27;borders were open&amp;#x27; - the price in US would go down, the price in Canada would go up, roughly to the same price.&lt;p&gt;I understand that it seems odd, but I reject the idea that it&amp;#x27;s &amp;#x27;corrupt&amp;#x27; to sell to one country at a different price than another.&lt;p&gt;Drugs are essentially IP, so it would be like the US selling Canada the &amp;#x27;Superbowl&amp;#x27; and then Canada selling and broadcasting it to the rest of the world at a discount.&lt;p&gt;I think something should be done about that - but drugs are not like most goods. And of course, many goods have different controls and regimes.&lt;p&gt;Another aspect: it&amp;#x27;s not really &amp;#x27;free trade&amp;#x27; when a government entirely regulates the economy for a good. So when gov of Canada &amp;#x27;sets prices&amp;#x27; for a good, it kind of flies in the face of regular trade rules and potentially gives one side or another advantages, so it really doesn&amp;#x27;t fit well under things like WTO or NAFTA.&lt;p&gt;Surely we could have some new thinking about this though ...</text></comment>