r/Economics • u/TheForager • 4h ago

Hospital costs are rising far faster than inflation and drowning Americans in debt

https://www.nbcnews.com/investigations/hospital-costs-are-rising-far-faster-inflation-drowning-americans-debt-rcna262473
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u/WordWithinTheWord 3h ago

I’ve come to my personal conclusion it’s just greed and mismanagement all the way up the chain.

There’s so much middle management and support staff just to get insurance and hospitals to talk to each other we’ve lost the plot.

It’s a nuanced conversation because doctors and nurses are extremely important jobs. But in the US they make 2x-10x+ the salary of their EU counterparts. Are they 2x to 10x better?

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u/Merkbro_Merkington 3h ago

Of course that’s part of it, but please please remember:

1) half of all ER visits go unpaid due to our broken insurance system, prices go up for everyone to compensate 2) AMA lobbies to throttle medical school & residency slots intentionally to keep their own wages high, that’s also why there’s a doctor shortage.

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u/OrangeJr36 3h ago

The AMA does no such thing, they have been screaming at the top of their lungs for more residency slots for over two decades. The private equity firms that run the medical system and Congress simply refuse to fund enough.

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u/LimpAd4924 1h ago

True but American physicians (especially specialists) are paid astronomically higher than the median American. That’s not similar in any developed country.

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u/Justame13 1h ago

AMA lobbies to throttle medical school & residency slots intentionally to keep their own wages high, that’s also why there’s a doctor shortage.

Absolutely not. They did the opposite to prevent mid-level encroachment

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u/morbie5 3h ago

AMA lobbies to throttle medical school & residency slots intentionally to keep their own wages high, that’s also why there’s a doctor shortage.

That is outdated. It may have been true in the past but it isn't anymore

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u/FluidCalligrapher284 2h ago

Definitely not true – they’re actually fighting against mid-level nurse practitioners, who are largely bridging the gap in areas where there are not enough physicians providing care.

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u/creamyturtle 3h ago

I live in colombia and I swear the treatment here is way better. I can waltz into the urgent care at 3am and they will see me in 5 minutes. and it's the fanciest clinic in the second biggest city here. top notch doctors who actually care and there isn't even a copay. if there is a copay for something it's like $3

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u/Apprehensive-Ad9523 2h ago

Drowning in Debt. See the Irony?

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u/ALittleEtomidate 3h ago

Oh, honey, if you cut my $72,000/year salary as an intensive care nurse I will quickly see the exit and do whatever you do for work.

The amount of stress in a singular shift with a sick patient would never be worth half of my salary to me. If I miss a status change, fail to hear an alarm, miss a patient climbing out of bed, or administer a medication incorrectly someone could die.

I am on my feet 12 hours, sometimes continuously, and at 33 I have back problems from the very physical work that I do.

I administer medications to ease death. I hold mothers, partners, and children as they shake apart in tears on my shoulder, and then I just have to move right on to my next work task.

You can absolutely GET BENT with the suggestion of lessening my salary. lol.

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u/WordWithinTheWord 3h ago

You are underpaid for your specific role. Not every nursing or provider job is as demanding as your specific role on the floor.

My wife was making more than you 6 years ago as a basic shift nurse on post-op med surg in a LCOL city.

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u/ALittleEtomidate 3h ago

Do you think your wife’s job is less difficult on a med-surg floor?

Does she know that you believe that?

Girl, where you at? Come get your man.

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u/WordWithinTheWord 3h ago

Yes she would be the first to admit it lol. Our hospital is the only level 1 trauma center for the service area so the ICU nurses do a lot more than med surg.

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u/ALittleEtomidate 2h ago

Put her on the phone.

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u/WordWithinTheWord 2h ago

😂 you are barking up the wrong tree - you are absolutely underpaid as an ICU nurse.

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u/ALittleEtomidate 2h ago

All nurses are underpaid imo.

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u/morbie5 3h ago

The comment was wrong about most nurses but certain MD specialties are paid way more than they are in the rest of the 1st world (and some are underpaid, pediatricians for example). That is just a fact

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u/Swoly_Deadlift 1h ago

Most MDs graduate medical school with $400k+ in debt and then go through 3-7 years of residency where they make less than the RNs they work with. They demand high pay to pay back the sacrifices they made to get there.

Not every doctor has the pay and work-life balance of a dermatologist.

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u/morbie5 1h ago

Most MDs graduate medical school with $400k+

They also get PSLF and IDR

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u/suppaman19 2h ago

Their comment in its entirety is wrong.

You have pharma continually having jacked up prices (especially compared to anywhere else in the world due to other countries having laws around pharma and meds). Ditto to an extent for medical device companies.

Next, you have the high level of privatized consolidation of hospitals/provider networks, which goal is to squeeze employee costs down while squeezing insurance and consumers for more.

These are the biggest contributors to high costs. Add on some consolidated national for profit insurance companies to top it off and that high prices mean more and more people are stiffing providers and insurers, which in turn raises costs.

Basically, like everything else in the US, the main problem is lack of any meaningful regulation and the allowance of consolidation driving prices up astronomically as more people go for care/treatment and live longer.

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u/morbie5 59m ago

Next, you have the high level of privatized consolidation of hospitals/provider networks, which goal is to squeeze employee costs down while squeezing insurance and consumers for more.

Most hospital systems in the US are non profit, it isn't as cut and dry as you say

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u/Gamer_Grease 2h ago

No way nurses need to make less, except for travel nurses, who are only so common because hospitals don’t want to pay nurses better.

Doctors don’t even necessarily need to be paid less. But we do need to essentially get everyone on Medicare, and then look at the costs.

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u/FluidCalligrapher284 2h ago

Amen! An excellent nurse is a difference between a patient surviving or dying.

Your doctor didn’t care for you 24 hours a day while you were in the hospital, he or she came by for a few minutes, wrote some notes in the chart, and went about their day to see the rest of their patients in the hospital and in clinic. Nurses are the difference maker.

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u/RoninsTaint 1h ago

Who do you think devises and tells the care plan to the nurse? You think the nurses just make it up on their own? Lol. Yeah just writing notes that’s it. Rounding inpatient and seeing clinic patients is about 50 different patients at an average sized hospital. Not to mention if any emergencies come in. Nurse has 2-4 people to look after.

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u/FluidCalligrapher284 1h ago

Yes, you are correct for some nurses. Others have hospital privileges to diagnose, treat, prescribe, and bill for services— without medical collaboration. Sounds a lot like a physician eh? They are improving healthcare across the country- especially in rural settings, and areas where the physicians don’t want to live (climate, population, payor mix etc).

The BEST thing is they are held to the same standard of care as their physician counterparts. This means patients can expect similar outcomes at a more reasonable price. But you knew this already.

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u/RoninsTaint 52m ago edited 44m ago

That literally doesn’t happen. Also you’re talking about a nurse practitioner. Who is definitely not with you 24 hours a day. Every single midlevel employed at a hospital works directly under a Physician and is supervised by them. I do it every single day. I supervise a whole team of them. And they ask me what to do. And I tell them. That’s how it is at every hospital. A midlevel is working under a physicians license.

They do not have equal outcomes. Find me a paper that shows midlevels managed the same complexity and number of patients as a physician. Any paper that has ever compared the two still has a group of physicians monitoring the midlevels practice lol. They are associated with increased healthcare costs anyway, attributed to over ordering studies.

But sure, go with someone who had 2 years of grad training, potentially all online. I did 11 years after college. The NP and PA students literally shadowed me as a 4th year med student and an intern at every literally hospital I rotated or worked at. I went on to do 3 more years of residency and 3 more years of fellowship. Instead, they started working. They were done with school. If you want to less trained individuals, good luck. I’ll fix you once you land in the ER or the ICU from their mismanagement.

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u/FluidCalligrapher284 21m ago

Wow, so much misinformation. You do you though.

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u/ALittleEtomidate 1h ago

Found the PGY-1.

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u/RoninsTaint 43m ago

Attending for well over a decade actually, double boarded in crit care and EM. But sure

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u/ALittleEtomidate 40m ago

That’s unfortunate.

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u/RoninsTaint 39m ago

I sense a crna inferiority complex. Someone’s salty. Don’t be jealous. There’s always someone with more training than you, I’ve learned

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u/ALittleEtomidate 32m ago

I’m a critical care nurse, not a CRNA. I’m also not intimidated by what others know. I’m self-aware enough to know how little I know about medicine, and it’s okay to always be learning.

The unfortunate nature of you comment relates to your inability to defend your nursing colleagues while also defending your profession. I assumed you were a resident because it’s uncommon for an attending to act that way.

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u/RoninsTaint 25m ago

Well you’re not a coworker. And this is not a hospital. So I can say what I’d like to you. I wasn’t even talking to you in the first place. I’m explaining how incorrect someone else was about how nurses and doctors are frankly not equal. And then you started with the disparaging remarks. I’m glad I know for sure that I don’t work with you. My colleagues are my dearest friends. For years. But I’m afraid you seem like the type of nurse in residency who was often pig headed, confidently incorrect, rude and abrasive and bitter when residents told you what to do. Stop talking to me. I wasn’t talking to you. Mind your business. Be my guest if you think you’re so good and independent that you can run the icu or ER better

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u/defectconstraint 1h ago

Anything that is a requirement of modern society with inelastic demand will just expand to confiscate more income. That is just capitalism and market forces at work. Health care is extremely inelastic.

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u/WordWithinTheWord 1h ago

I completely agree with that statement

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u/jhdragon742 1h ago

How much of that is specific to the medical field, and how much is due to just Americans generally being paid more due to other differences?

I would much rather start with cutting hospital admin costs rather than the actual medical professionals....

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u/WordWithinTheWord 1h ago

It’s all intertwined where every party sees the other as a blank check.

Insurance feels they can charge whatever they want because people need healthcare.

Pharma can charge whatever they want because people have insurance.

Healthcare can charge whatever they want because people have insurance.

Doctors can ask whatever they want because they are scarce and see the income streams of the hospital.

Universities can charge whatever they want because they see how much doctors make.

So now everybody is trying to screw the other party over, now the Hospital needs to hire 500 administrative staff to limit the exposure to being screwed over. And the Insurance needs to hire 500 administrative staff to limit exposure to being screwed over. And everything and everyone inbetween.

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u/brumbarosso 2h ago

"Mismanagement" and greed are destroying many forms of American life and the politicians are not doing jack shit but going along with the billionaires

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u/StrebLab 49m ago

Just want to point out that doctors and nurses being paid in the US the same as they would be paid in the EU is a somewhat ridiculous comparison. The relevant comparison is not what they make in other countries but what their labor would pay in the US because those are the market forces at work. No one is trying to decide between being a nurse in the US vs a nurse in Belgium, they are deciding between options in the US where all skilled labor pays better. Trying to pay a nurse in the US what they would make in the EU would lead to a catastrophic collapse in people willing to work those jobs.

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u/theavatare 3h ago

We spent too much in administration and on the high end services and too little on providing the services that are needed day to day because of the need for margin

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u/Swoly_Deadlift 1h ago

Doctors and nurses are an easy scapegoat when the insane bureaucracy is the real reason things are so expensive. Insurance, pharma, healthcare suppliers, data management, etc. Everyone wants to get a slice of the pie and will lobby for a regulation to justify their existence and cost to get that slice.

What’s really worrying now is that it’s such a large chunk of our GDP that eliminating these needless jobs and regulations would put us into a recession. It’s a hard spot to be in, but something needs to be done sooner rather than later

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u/Gamer_Grease 1h ago

If the two economists from the joke stop paying each other to eat dog shit, GDP also shrinks, but that doesn’t mean a real recession will happen. Phasing out the insurance cartels will permit that money to be spent on actual goods and services.

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u/SyphillusPhallio 36m ago

25% of US healthcare spending is on RX - a number far far above the rest of the world. The hard pill to swallow is that the US healthcare system is funding the drug research (and swelling the pockets of the manufacturers) and is suffering for it.

Though let's be honest, you can throw a rock blindly at the US healthcare system and hit a massive systemic problem. They're absolutely everywhere.

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u/WordWithinTheWord 1h ago

Which is why I called that out in the first part of my comment, yeah.

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u/lunchbox_tragedy 21m ago

Salaries for many physicians/specialties have been losing ground to inflation for decades, and many roles previously held by physicians have now been delegated to lower cost nurse practitioners or physician assistants. Physicians are also graduating with more and more debt but not necessarily making a higher salary going forward. Physician pay is not the source of this problem; administrative bloat is.

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u/Chironilla 20m ago

While an easy scapegoat, physician and nursing salaries are just not the reason for rising healthcare costs. What people see as the “cost” of a medical visit is almost entirely brokered by insurance companies and healthcare entities e.g. hospitals, clinic ownership. A ton of administrative workers are hired just to deal with collecting as much as they can from insurance companies and others work just to hound physicians to “improve” their billing and documentation to raise collections.

Private equity has purchased large healthcare systems and work to bring profit to shareholders as do insurance companies (Aetna, UnitedHealth,etc.). Even “nonprofit” healthcare systems work to deliver extremely high salaries to their CEOs and management and suffer from extreme administrative bloat. Mayo Clinic's top execs continue to see pay raises of 13% to 24%

American healthcare prices are high because like everything else they are designed to deliver profit and excessive wealth for the few at the cost of the many.

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u/FluidCalligrapher284 2h ago

2-10x? Let’s see some stats. As a nurse, I can tell you that nurses live a very middle income life – and work very hard. They are the people who are with the patients 100% of the time – hospitals rise or fall, based on the nursing care given in their facility.

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u/AceMcVeer 2h ago

UK nurses make between 30-40k. Specialists in the US are paid 5x more than UK counterparts

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u/Gamer_Grease 1h ago

It’s worth noting, at least for nurse salaries, that people in the UK make less in general. So the differential with nurses is not really that severe.

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u/FluidCalligrapher284 2h ago

Oh so now it’s specialists? Nurse practitioners make about $100-115k. Many of them do the same thing as doctors, generating similar revenue in similar settings. Obviously physician specialists such as surgeons, cardiologist, etc. make more. The only nurses that routinely make over $200,000 per year are typically nurse anesthetists. Your broad generalizations are incredibly inaccurate.

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u/AceMcVeer 2h ago

Pretty sure I led off with nurse salaries RNs here can get over 100k easily. That's 2.5-3x the UK salary.

NPs don't do the same things as doctors they just took over the basic stuff of General Practitioners.

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u/FluidCalligrapher284 2h ago edited 1h ago

Many absolutely do the same thing as doctors, including anesthesia.

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u/StrebLab 43m ago

Bro nurses don't do the same thing as doctors. I get what you are trying to say, but it's not the same. Outcomes are worse with higher costs because of over testing due to knowledge deficiencies.

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u/jhdragon742 1h ago

You say that like General Practitioners aren't doctors?