Godwin's Healthcare

Cost Disease in the Medical Industry

The term “Godwin’s Law” (also known as Godwin's rule of Hitler analogies) is a statement maintaining that if any online discussion continues long enough, someone will almost certainly compare somebody else to Hitler. This will be a very long and controversial post, so you can be assured that Hitler comparisons will come up at some point. After all, I’m going to be discussing the reason that medical costs are so high in the healthcare industry, and the Nazis were also very big into medicine, as I’m sure some snarky online Induhvidual will be sure to point out to me.

But what are my medical credentials and what qualifies me to talk about this problem? I’m fortunate enough to have a fairly in-depth knowledge of this topic, because I interact frequently with the medical system both as a consumer and an analyst. As a consumer, I receive regular treatments for chronic allergies (I’m allergic to almost everything on the planet, and have been receiving recurring allergy treatments for several years in order to minimize my unpleasant allergic reactions). As an analyst, I analyze costs for a large healthcare provider, so I’m fortunate enough to understand exactly why healthcare bills are so high, and what can be done to fix it.

But before we can talk about solving this problem, we first need to acknowledge that there even is a problem in the first place, something that very few politicians are willing to concede. Let’s use my own experience as an example. My last hospital bill was $5880. Of this, insurance paid $3952.60, leaving me with a total adjusted bill of $1927.40. That’s a lot of money. I’m lucky enough to make six figures so I can afford it, but imagine how a minimum wage employee would experience being hit by this bill, which would be over a month of their income after taxes. Also, consider that a lot of minimum wage employees don’t have health insurance, so instead of paying the reduced bill like I am, they would be paying the full amount of $5880 - three months of their salary! Again, this cost is not for some rare and expensive medical treatment: this is just treatment for allergies - a condition which affects between 10% and 30% of the population. If you’re a minimum wage worker and you have a kid who rolls badly on the genetic lottery table during character creation, tough luck - you can easily expect to kiss goodbye to a quarter of your paycheck purely due to the medical bills. When you factor in normal childcare expenses as well, that number will probably go up to half your salary. At these costs, can we really be surprised that so few Americans are choosing to have kids? Our politicians have effectively criminalized any discussion of the Great Replacement conspiracy theory: the idea that our political elites are trying to wipe out American citizens and replace them with immigrants. But just by looking at the numbers it seems pretty clear that there is indeed a Great Replacement in progress: the economic incentives provided by our society are effectively designed to wipe out the traditional American family unit. And who designs our economic incentives if not our political elites? It’s hard not to get angry when you do the math and realize that the people in charge of our society are essentially trying to exterminate you by limiting your ability to financially provide for a family… but this isn’t a post about politics. Let’s take a more in-depth look at why medical expenses in the U.S. are so high.

To be succinct, most cost disease in the medical field boils down to two words: price gouging. For example, take your average software contract. For most industries, the price of a software contract is roughly correlated to the price it takes to produce the software. For example, Oracle makes industrial-strength database products. If a small company were to purchase the Oracle Database 19C product for a certain number of licensed users, they would pay roughly the same amount as a large company purchasing the same product for that number of licensed users. Obviously there would be other factors that go into the pricing: for example, if one of the companies had more skillful negotiators or already did a lot of business with Oracle, they would probably receive more favorable pricing. My point is simply that the price of a particular piece of software is generally correlated to the effort it takes to produce that software. In fact, for some software products, like Atlassian (which manufactures the software product Jira) there is frequently no opportunity to negotiate at all - everybody pays exactly the same price for a license, and in fact the last time I checked, Atlassian didn’t even have sales representatives to negotiate with.

In healthcare, the price of software licenses is frequently not tethered to the production costs in any way whatsoever. Instead, it is based on the number of beds a hospital has in their recovery unit. Since surgery is the bread-and-butter product of a hospital (this is where they generate the most revenue) hospitals are financially incentivized to rush patients out of the hospital as quickly as possible so that the recovery beds are available for more surgery patients. (Needless to say, this is not always best for the patients.) The interesting thing is that there is no morally justifiable reason for the software products to cost more based on the number of beds. I used to be a software programmer, so I can tell you from personal experience that it doesn’t take more effect or work for them to create a product for a hospital with more beds. It’s exactly the same cost: the reason they charge more is simply because they can. After all, this is the industry standard. Every other software vendor in this industry does it, so why shouldn’t they? This means that hospitals are frequently unable to use the same economies of scale that other industries benefit from.

It is important to understand that for many of these products, more beds does not necessarily correlate to more use of the product. The reason the number of beds is used as a metric for licensing costs is simply because it is a measurable objective value that frequently correlates to how profitable a hospital is. To put this into perspective and give you some understanding of why this kind of licensing model is unfair, imagine that if I were to buy a Big Mac from McDonalds it would cost me $8, but if Jeff Bezos were to buy a Big Mac, he would get charged $80,000. This is basically the billing structure of many vendors in the medical industry. While some might say it’s fair for billionaires to pay more (and I can certainly see the merit in that when it comes to things like taxes) I feel like this argument loses all validity when the people being charged extortionate pricing are institutions which contribute to the public good, such as hospitals. After all, the hospital isn’t really the one paying the additional $80,000. That higher cost gets passed on to you, the consumer, through taxes and extravagant medical bills, as well as insurance companies who also pass the bill on to you by raising their premiums. If you want to know why my allergy medications cost $1470 a vial, or why a hospital will bill you $15 for a single aspirin pill, or why Americans without medical insurance are losing their homes and declaring bankruptcy over a single visit to the ER, there’s your answer.

So what is the solution to this problem? It’s not as if the vendors that provide software to the healthcare companies are going to suddenly change their business model of their own volition, because why would they switch from a price gouging business model to one where they make less money? I had hoped that Haven Healthcare might be able to reinvent healthcare and eliminate the inefficiencies and price gouging, but that joint venture was scrapped.

One option that some have suggested would be for the government to impose a price ceiling on people who sell to the healthcare industry. But that level of interference in the free market rarely works well. When you impose a price ceiling, then you are limiting innovation because new experimental treatments always cost more until they have become established enough for the price to go down. For every incidence of price gouging, you can find one example where the price of a product is high for a good legitimate reason, and imposing a price ceiling on healthcare products would cause those manufacturers to go out of business or be forced to lower the quality of their products to meet the requirements of the price ceiling. In short, I believe that over-regulation causes more problems than it fixes.

Instead, my suggestion is that the government needs to go into the software and hardware industry and offer some competition to the private companies. This way, when a line of products is unreasonably priced due to all the existing vendors using the “price gouging business model” the government can come up with an alternative product and the existing vendors will either need to scramble to become competitive or go out of business. Obviously, highly specialized fields should not be entered by the government: for example, I wouldn’t expect the government to get good results manufacturing spectrum chromatography devices. However, there are a lot of fields in the medical industry where not much specialized knowledge is required, and government could easily fill in the role of being a low-cost provider for these areas. For example, take science journals. These are ridiculously expensive, and most science journals are already low quality, with very little vetting to ensure that the information is accurate. (Hence the reason that we have a replication crisis.) The people who run these companies don’t really add much real value: all they do is act as middlemen taking a cut. The government could handle this role just as effectively, and any profits that the government made would trickle up to the taxpayer rather than down to some greedy oligarch. Similarly, making software to manage hospital administrative tasks is not a particularly difficult or complicated task. A small software team could easily design replacements for a lot of high-budget software and drive the bloated inefficient corporations out of business. This isn’t rocket science: I’ve been in the IT field for decades and even managed a couple of automation projects. Anybody who tells you that this would be super complicated to do is either an idiot or a liar. And while I may not be a biology expert, I’m pretty sure that mixing some allergens together into a vial and measuring the allergen dosage carefully shouldn’t cost almost $1500 per vial. All of these are examples of low-hanging fruit that the government could get involved in to reduce inefficiencies within healthcare. After all, plenty of companies manufacture generic drugs that function as low-cost replacements for highly specialized and much more expensive treatments, so why shouldn’t we also have generic software or hardware that functions as a low-cost replacement for highly specialized and exceedingly expensive medical products?

I’ll tell you why: because of Hitler and Stalin. It’s all their fault.

See these guys? They’re the ones to blame for your high insurance deductible.

It may sound unreasonable to blame our healthcare problems on two dictators who have been dead for decades, but hear me out. The reason Stalin is to blame is because he made socialism into a dirty word associated with genocide, so that now whenever anybody even vaguely suggests that there are some aspects of society which shouldn’t be privatized by libertarians, they get accused of being communists. What, you don’t think our police force should be owned by private corporations? You believe that police shouldn’t be forced to wear badges with the logos of their corporate sponsors? Clearly you’re an admirer of Stalin and nothing you say can be taken seriously. Obviously the solution to all society’s problems is to privatize literally everything, from healthcare to religion, and if you have a problem with your priest saying “This sermon was sponsored by McDonalds: I’m Lovin’ It!” at the end of every homily then according to our elites, you’re an evil Marxist monster. That’s why Stalin is partially to blame for our healthcare problems. His genocidal rampage became the boogeyman in the closet that all our globalist oligarchs use to scare everybody out of supporting any sort of social structure where they would make fewer profits.

Of course, the idea of socializing essential services does have one valid critique: the fact that the more people are in your society the harder it is to maintain a strong social safety net. The concept of having free social services like education and healthcare does not combine well with having open borders since a lot of selfish parasitic foreigners will immediately come in and try to exploit your government’s generosity. These parasites won’t care about your culture or the society that made such prosperity possible: they are simply leeches who want to take and take without ever giving anything back. That’s why effective socialism needs to be paired with a strong sense of nationalism: so that a society that is good at taking care of its own citizens can limit immigration and stop their social safety net from being exploited by freeloaders. One might almost say that the most effective system of government is nationalistic socialism. Hmmm, “Nationalist Socialism.” It sounds vaguely familiar. Where have I heard that before?

Oh, that’s right, Hitler. This is how Hitler was responsible for totally effing up our healthcare system: by going on a genocidal rampage that forever associated the most egalitarian social model in the world with concentration camps and mass slaughter. Here’s a little secret for you: the reason Hitler was so popular with German citizens wasn’t because of his desire to kill the Jews. That was just his own little pet project: an unpleasant personal quirk that all the other Germans were willing to tolerate because everything else about his societal model promised them a utopia. In fact, if you examine Nazi society from the perspective of an anthropologist and take away the whole “Killing Jews and Gypsies” thing, it actually was an extremely effective and benevolent society which was beloved by many of its citizens, to the point that they were willing to sacrifice their own lives to spread their ideology to the rest of the world. The only flaw Nazi Germany really had was genocide, and I don’t see why genocide has to be an inherent part of every Nationalist Socialism economic model. We’re all adults here and I think we ought to be mature enough to understand that not every single thing associated with Hitler was bad. For example, Hitler was a vegetarian highly concerned about animal cruelty. Does that mean every single vegetarian in the world is a fascist in training? Should we be concerned that everybody out there who is concerned about cruelty to animals is the next Hitler? In short, is Billie Eilish a psychopathic Nazi-enabler? If literally everything Hitler did was bad, then these are all very reasonable questions to ask. Also, if we are so desperate to avoid Godwin’s law that we will do anything to avoid being compared to Hitler, then I’d like to point out that Hitler was well known to breathe oxygen, which means that breathing is inherently an act of Nazi solidarity and you’re enabling fascists by your shocking act of breathing. You should stop doing that right away, because it'll save the rest of us the trouble of dealing with your idiocy.

Sadly, many people genuinely are this stupid, which is why our healthcare model is so screwed up. The second anybody suggests a healthcare model that would efficiently serve our citizens instead of our oligarchs, some paid shill will immediately accuse them of being either Hitler or Stalin, in order to suppress their good ideas which would harm our entrenched oligarchy. In fact, I’m absolutely confident that right now, some idiotic Induhvidual out there is reading this and absolutely seething about the fact that I suggested a healthcare model “straight out of the Nazi playbook!” So let me be crystal clear about my intentions: I have zero desire to exterminate Jews or Gypsies. I only express political support for non-genocidal regimes.

Although… in the interests of full disclosure… I do admit that there is a limit to how much ignorant stupidity a man can take, so sometimes the idea of exterminating hysterical online idiots who constantly draw false equivalencies to fascism does sound pretty tempting. There’s a chance I could be convinced to be down for that.