NPR: $142,938 in medical costs for a young camper’s snakebite.
Robert Graboyes tells the rest of the story: the family paid none of the bill.
Drug shortages explained: Over time, price and margin erosion lead to essential medicines becoming low-margin commodities, and eventual production and supply issues create vulnerability to shortages and susceptibility to low reinvestment.
Medicaid managed care explained: Enrollment in the lowest-spending plan reduces spending by at least 25 percent [but] rather than reducing “wasteful” spending, lower-spending plans broadly reduce medical service provision— including the provision of low-cost, high-value care—and worsen beneficiary satisfaction and health.
Thanks for posting the articles on the snakebite case and over-billing.
Robert Graboyes is about 90% correct in all that he says. His only error is to use the estimate of $2.5 billion as the cost of bringing a new drug to market. That number came from a Tufts University study about 20 years ago and has been challenged repeatedly as, frankly, a piece of propaganda for the drug companies. Yes, drug trials are wildly expensive and can cost $50 million. But that is a long way from $2.5 billion, and even if twenty scientists worked full time on a new drug for ten years the cost would not approach $2.5 billion. Merrill Goozner is just one of the writers who has challenged the Tufts study.
Robert Graboyes also discussed the high charges of about $40,000 for air ambulance transport.
He points out correctly that helicopters are expensive – at least $5 million per vehicle – and it takes 13 full time employees to offer full emergency services. This cost must be spread over only a few ‘customers’ each month.
Here is my alternative. Have state government fund the whole air ambulance operation, If the cost of doing so is $8 million a year, that is absolute peanuts in a typical state budget.
This is basically the way we fund fire and police departments, The government incurs a cost so that individuals are not bankrupted for emergency care.
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“$8 million a year, that is absolute peanuts in a typical state budget.”
Bob, you must buy much more expensive peanuts than I do.
But suppose your suggestion were enacted by a state, what growth do you expect in the number of helicopter rescue operators after 5 years? 5 years after that? And so on? I would expect a fair amount of new operators, wouldn’t you? After all, when the state guarantees payment, the helicopter rescue operation changes from a financially risky deal to a state-funded one. My guess is that would attract more players.
That means to me that the cost will rapidly grow far above $8 million. And the benefits would go to a relatively tiny number of people, most of whom arguably got themselves lost in a wilderness, or on a mountain, or stuck on a glacier. When lots of people are homeless and hungry, would you vote for spending even $8 million that could otherwise go to that larger number of disadvantaged voters? I doubt any state legislature would accept this responsibility – even with a reliable estimate of future costs.
John, you and I would not get along too well if we were in the same legislature. My disposition is to mostly ignore the small stuff, and yours is to challenge everything. Sort of like Chuck Grassley vs. Bernie Sanders.
My state of MN has a 2024 budget of $58 billion. $8 million for helicoptors does seem pretty small in that context.
We spend a lot of $ on all kinds of ways to save lives….dialysis, well-equipped emergency rooms, et al. I can tolerate a little looseness for ambulances.
Thanks for the comments though!
You did not answer my question. You can still answer any time.
I remain unpersuaded about your idea. No matter what ginormous number you compare the $8 million to. No matter if you call it “peanuts”. It’s still $8 million. That’s taxpayer money and taxpayers are thoroughly disgusted with legislatures that spend money that favors the few at the expense of the many. Maybe you have a more persuasive defense of your idea than you have stated?
If I were so unfortunate as to sit in any legislature I would certainly regard it my duty to challenge spending. Grifters throng to petition the government for other peoples’ money. I regard it the legislature’s duty to spend other people’s money carefully and for the benefit of the most possible people (despite their practice of scraping off as much graft as possible in the process). So yeah, I would be unpopular.
btw, I’m flattered to be compared to Chuck Grassley. You also chose an ideal socialist avatar for yourself. Do you comb your hair with a balloon too? 🤷♂️
Many of the beneficiaries of air ambulances are not careless wealthy ski bums. They are regular people in rural areas who have a condition that the small local hospital cannot treat effectively. The air ambulance gets them to a regional trauma center much faster than ground ambulances.
Fascinating article by Bill Shein in The Berkshire Edge of 3-22-23. Turns out that a large number of air ambulances are owned by private equity, who have relied on out-of-network surprise billing to generate profits. The new federal law is putting these predators out of business.
If the only options for funding are state government vs. private equity, I choose state government every time.
Air ambulances do benefit the few. But so do preemie units and ICU’s in hospitals generally.
American medical care does provide expensive resources for conditions that many other nations essentially ignore, Maybe air ambulances are the place to draw the line. I say not.
You say that the outlays for air ambulances will grow over time. I agree. Seems like a benign growth to me, if rural patients are having their lives saved by quicker treatment of internal bleeding, etc.
I like Sen.Grassley a lot. He still visits every Iowa county every year and talks to local officials.
“ If the only options for funding are state government vs. private equity, I choose state government every time.”
You know it’s almost never that simple. My opinion: “Every time” is unwise. Look at government’s management record. It’s quite spotty. Public schools are prime examples of government failure though there are others. Private schools are generally far superior. Yet there are things only the government can do. Military. Administration laws and the justice system. But choose government over private every time? Not me.
Hartford Hospital owns several helicopters and they are flying most of the time 24 x 7. That seems pretty efficient to me. I doubt the ability of the State to match that level of efficiency. Even if the state wished to be in the business of running an air ambulance service, which I also doubt. Because it requires capital and people cost which means raising revenue to support it which means tax expenditures. The state could of course undercut the hospital’s pricing by using taxpayers’ money. But that isn’t really “efficiency” is it? Don’t forget the federales outsource the administration of many programs e.g., ACA and Medicare, for the same reasons.
“ Air ambulances do benefit the few. But so do preemie units and ICU’s in hospitals generally.”
Economics is known as the dismal science because resources are always limited and demand always exceeds supply. That forces unpleasant decisions. Not easy decisions between “bad” and “good”. But difficult decisions between “good” and “good” when you don’t have the money for both. Adding cost is almost never “benign” because it inevitably crowds out other important government spending. Especially if the probable growth of added costs is not understood or is ignored or is bent to political pressure. Shall resources be allocated to end of life care, and the so-called orphan drugs? At the expense of police for example? Or of teachers? Or maintenance of roads or management systems? Mismanagement of limited resources leads to government failures. That’s not benign at all.
As we read in the media every day.