<p>Major Forces Affecting Healthcare
Basics: Why Healthcare is Different, and
Healthcare is different from most other industries because the
supplier of the product sets the demand for the product.
IE, the MD tells the patient that he/she needs a lab test, a MRI, a THA, etc.
So you don't have those simple independent demand and supply curves
that economists love so much.
It is if you went into McDonald's and the voice on the drive thru speaker
told you your order as opposed to you telling them.
of Key Players
(that I'm qualified to
speak to. Excludes
in care, gene therapy,
shift to outpatient,
Political Power = Unequal Playing Field
Pharmaceutical companies: Medicare is forbidden to
negotiate the price it pays for Rx
Medicare pays 40% more on average than the V.A. for the same Rx
We pay $450 wholesale per dose for Synvisc One, could buy it over
the counter from Canada for $150 retail.
Insurance companies got all they wanted out of the ACA
Plenty of $ to be made at 80% loss ratio
Blocking specialty hospitals and slowing move to outpatient
CON laws are antiquated and stifle innovation. In what Econ 101
model does restricting supply not raise cost?
Fragmented and academic vs. private practice conflict = no real
effective voice at the table.
Descending Order of Power14
A quick digression: Pharmaceutical Companies
Drug Goes From $13.50 a Tablet to $750, Overnight
The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a startup run by a former hedge
fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of
treatment for some p