US Healthcare vs. the Rest of the World
Medical Costs Infographic
Via: Medical Billing and Coding

via Business Pundit

Category: Digital Media, Economy, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

101 Responses to “A Look at Absurd US Healthcosts (vs. Rest of the World)”

  1. wsm3 says:

    Answer: you get what you pay for.

    The U.S. has the best healthcare in the world (mainly at the high-end – major, non-routine, etc…). And in areas where it does not, people are going to other countries to get those procedures done cheaper.

    But since the majority of care is best in the U.S., it is all priced higher, including the regular routine stuff, since people won’t leave the country for that stuff.

    ~~~

    BR: I have to challenge that statement, which is misleading.

    The issue here is “What is the quality of health care ACTUALLY PROVIDED to the citizens of the US?”

    Not what is available if you can afford top shelf care, but what the citizenry actually receives. The answer to that is sub-optimal in many cases, and subpar in others

  2. carpediem0496 says:

    Quality, tort costs, regulatory costs, cost shifting, third party payers, technological advances and exemption from the Robinson Patman Act (which exempts many healthcare participants thereby permitting price discrimination), among other things, are among the many reasons why healthcare costs are higher in America.

    Our system is screwed up. But that does not mean socialized medicine is the answer. I don’t believe in equality of outcome because the elite in socialized healthcare systems still receive the best treatment. The last thing I want is ObamaCare.

    My view is based upon consumer directed principles where competition thrives, transparency into price and quality exist, HSAs are the norm, tort reform has occurred, price discrimination is not permitted, insurance is insurance and not a mechanism to pay for all costs healthcare related and more.

    ~~~

    BR: Extensive Data has shown that the Tort issue is insignificant aspect to the total cost of care on the US>

  3. it isn’t the ‘Health Care’ that Costs soo much..in *Reality, as We all know, good Nutrition, clean Water, and reasonable activity/exercise slay many ‘Health’ dilemmas..

    it’s the (ex- & pre-)tended, (pro- & ex-)tracted, “Death Care” that is, morbidly, expensive.
    ~~
    The total number of iatrogenic deaths shown in the following table is 783,936. It is evident that the American medical system is the leading cause of death and injury in the United States. Death by Medicine—-Carolyn Dean, MD, ND, Martin Feldman, MD, Gary Null, PhD, Debora Rasio, MD (2003/4)
    http://www.whale.to/a/dean.html

    http://medical-dictionary.thefreedictionary.com/iatrogenic

    http://www.thefreedictionary.com/dilemma

  4. ukarlewitz says:

    No, it’s not better than the rest of the world. I spent 10 years living in Australia, parts of Asia and Europe, and got much better healthcare in all of those places. It’s just more expensive here. And we live less long are generally less healthy. The myths surrounding US healthcare versus the rest of the world never cease the amaze.

  5. Jojo says:

    @wsm3 said – Answer: you get what you pay for.

    The U.S. has the best healthcare in the world (mainly at the high-end – major, non-routine, etc…). And in areas where it does not, people are going to other countries to get those procedures done cheaper.
    ———-
    Comments like the above are stupid.

    I can just imagine doctors in the rest of the world reading this BS. They must be feeling so insecure. Gee, if only we had good medical schools and had been able to obtain good medical training! If only we could become as good as those doctors in the USA! But alas, we are forever destined to be second rate doctors. [roflol]

  6. Jack says:

    @wsm3: you just inferred that the higher the price, the better the product. WTF?

    @carpe: you don’t “believe in equality of outcome” because current outcomes are not equal? What “consumer directed principle(s)” asks for competition, HSAs or tort reform. To me, a consumer directed principle is timely, high quality medical care at an affordable price. As a consumer I don’t give a rat’s ass about what it takes to get there. I might as a voter but not as a sick person.

    Finally, all currently available data tells us we do NOT have the best health care system. More than one study has concluded this using cost-benefit principles and stand-alone “quality of medicine” data. It frosts my banana when I see these competing, yes, competing, ads telling me about the best place to have my___________ectomy or _______ transplant or PET scan or other very expensive procedure only to read later about MRSA and c.diff infection rates caused by our highly professional caregivers who DON’T WASH THEIR FUCKING HANDS!

    End of rant.

  7. gordo365 says:

    Health care is too high because… Obama is a muslim. No, I mean, taxes are too high. No wait,because illegals are spreading disease. Argh I always get my spoon fed talking points mixed up.

  8. pekoe says:

    A lot of these countries are single payer. I wonder where US medicare vs non-medicare costs would plot on this graph. My guess is, that adjusted for the age of the patient, that medicare is still more, but not way more like is shown on this graph. My guess is that the miracle of the US free market is not so miraculous for the people it is supposed to serve. Now if you are an insurance company, miraculous indeed!

  9. wally says:

    This is one area where private enterprise (ie: health insurance companies) fall flat on their face compared to government services.
    I see that a corporation near me (United Health) just gave its CEO $10 million… and this following shortly after their rather expensive experience with the previous CEO. You will never see a government agency doing that kind of stupidity. Oh, they appear to have another new building under construction, too.

    It is also true that most doctors and medical institutions do not run themselves as businesses. They are obsessed with their ‘higher calling’ , make equipment and building purchases based on god-knows-what criteria (ever see an economically constructed hospital building in the US?) and spending hours of wasted time on verifying the insurance of customers, the credit worthiness, ‘coding’ for billing and on and on and on.

  10. river says:

    I am going to be pretty interested in what the answers are to why is it so expensive. I have my theories, but most of the things you here are ideologically driven (like wsm3 above).

    The thing about Obama Care that I didn’t like wasn’t that they were giving health care coverage to poor people that might cost me money, but that they didn’t appear to even address the problem that health care right now and today is way too expensive. In my name, I (and my employer) spend 1/6 of my overall income on health insurance, then I have a 1000 per person deductible, 3000 family deductible, which after reaching the insurance pays 80% until you get $3000 maximum out of pocket for an individual and $6000 maximum out of pocket for the family. 1/6th of my income to get basically crappy coverage.

  11. Soylent Green Is People says:

    Take some of those same charts and match them to the income or other tax percentages paid by the citizenry. Other countries healthcare isn’t cheaper, it appears to cost less because of public subsidies is my guess.

    Soylent Green Is People.

  12. Bill Wilson says:

    We need to switch from our fee for service system to one where hospitals are paid to keep you healthy.

    The debate over single payer versus private health insurance is irrelevant to lowering the costs and improving the quality.

  13. wally says:

    “…The last thing I want is ObamaCare.
    My view is based upon consumer directed principles where competition thrives, …”

    Simple proposition: give people an optional buy-in to “Obamacare”as an alternative to private health insurance and let the chips fall…

  14. cthwaites says:

    How much of the difference is tort/malpractice costs?

    ABA: None. We keep the system honest. You’re welcome. No charge.

    Everybody else: a lot. That’s why I have to have a CT scan when I tripped roller blading

  15. super_trooper says:

    looks like everything is 50%-100% more expensive. It doesn’t give me an idea why that’s the case across the board. Is this just the teaser for part II? I have ADD.

  16. DeDude says:

    “My view is based upon consumer directed principles where competition thrives, transparency into price and quality exist.”

    There is no way you could create the kind of knowledge needed for consumers to actually make and drive a good old capitalist price/quality squeeze onto health care products. We do not select our health care based on price and quality balances because we are not able to make a qualified judgment on quality and when our health/life is at stake we cannot assign rationale prices.

  17. willid3 says:

    not sure that health care can be a rational choice based on price and quality. since unless your are a doctor, you are unlikely to be able to make that choice as you don’t enough. and as others have noted, unless you are really able to make a choice on your own life under a very short time, your chances of getting it ‘cheap’ are 0.
    and tort reform has been tried in more than a few states. mine included. and it accomplished nothing. which the insurance companies said it would do when asked under oath. in my state, the real trouble in torts isn’t lawsuits, its the doctors. and only a handful of them at that. we have a hard time pulling doctor’s licenses for any thing by felonies. and some times not even then. thats the bigger cause of high malpractice insurance. and the old saw about defensive medicine might have been true, but some doctors use that to increase their incomes as they own the providers of lab services among others

  18. DeDude says:

    In soc!alized medicine the hospital gets x dollars to do as much good as it can. As a result you have informed experts of different specialties arguing about the cost-effectiveness of different approaches to care. The more expensive a new procedure or approach is stronger the requirement that it makes a real difference in health outcomes. So the market forces are there, it’s just that they work in exchanges or arguments between experts with the ability to judge price/product balances – rather than between con-men and patients with no clue about needs for or quality of products being conned onto them.

  19. Takeyourfinger says:

    Socialized medicine would appear to have the huge cost advantage of sovereign immunity, but the Tort lawyers probably wouldn’t let that happen.

  20. apataki says:

    We are an obese and violent nation and this skews are outcomes greatly; despite the superiority of our physicians and technology. A healthcare system that is presented with a large percent of the population that chooses to smoke, overeat, not exercise, and engage in violent behaviors is doomed from the start.

    I am a surgical specialist and have traveled and lived throughout the world. If I needed a major orthopedic, neurosurgical, cardiac, ophthalmic or general surgical procedure the US is where I would have it done. The post-graduate training is superior here and the majority of surgical innovations take place here. Close behind would be Australia, UK, Switzerland and Germany. There is a reason the rest of the world comes to the US for fellowship training and foreign heads of state fly in to Hopkins or Mayo for care.

    But, I our delivery system if very inefficient and costly. We insist on spending billions on futile end of life care and very expensive medications that are very little better than less costly alternatives. Americans refuse to accept any limitations on medical “choices” because a large majority of them are shielded from the relative costs of those choices.

    And yes, our physicians are paid more than the rest of the world. Not as much as you would think when figuring that we pay the cost of our education, malpractice etc… But, even if physician compensation were set 50% less than it is currently it would make a very small dent in the overall cost of healthcare. Physician services are just not a big enough part of overall medical costs.

  21. beaufou says:

    We are clients not patients anymore.
    I had a conversation with a doctor a few months ago, all he talked about were mergers and financial issues, not a single word about health and medicine related subjects, then again, they have to keep up with the expensive psychotic trophy wife and the million dollar mansion.
    For all the bad things one can say about Michael Moore, Sicko was spot on, my wife works in the medical field and was actually advised by her employers not to watch it.

    Maybe it is time to take a good look at health insurance companies exemption from the antitrust laws.
    They are the ones driving the prices up and in the case of a single payer system are totally obsolete, who in Washington is not getting paid to stay away from the subject?

  22. Andre says:

    The world Health Org did a matchup of all the world’s health organization in 2000, and the old US of A came in at 37 for effectiveness AND number one for cost:

    http://www.photius.com/rankings/healthranks.html

    Of course we’ve gotten better since then – NOT! I’ve been in the FEHBP since 1968. Here’s a little history: I have ears that tend to get wax buildup that gets quite severe. I used to go to a eye/ear/throat guy and he’d clean them out, first couple of times no charge whatsoever; last couple of times, $30 copay; the very last time they wanted me to see the Specialist’s intern (not even a doctor) but still $ 30; so I tried to get my Primary Care guy to get me into a specialist, and he told me, ‘no, just get hydrogen peroxide and a dropper and clean them yourself.’ The FEHBP started to go downhill with Nixon and has been going downhill since then, unless you’re a member of Congress. And Barry, you can skip part two: the reason the system is so expensive is because of insurance companies who do not add any value to the process but suck money out of it (US). When I got my bill today for a chest CT Scan (I smoked for 41 years) for $ 75 copay, I thought about the retiring head of Mass BC/BS who was recently given 11 million dollars as a severance package. And it’s a non-profit!

  23. arrian says:

    That data is from 2007, though one would be hard pressed to identify the specific source for each data point in the charts. Here’s the discussion in Canada today, four year later and after a lot of economic, political and social upheaval globally:

    Let’s add facts to health debate

    “The Conservative and the Liberal leaders must know, as perhaps the majority of Canadian already suspect, that Canada’s existing universal health delivery system is unsustainable. If makes no sense to continue to make grandiose public commitments to maintain a health care system that is based on crumbling structures, systemic inadequacies, economic incoherence and ideological paralysis. Mr. Ignatieff’s call for a first ministers’ meeting with provincial premiers within 60 days of the election is a meaningless gesture.”

    http://opinion.financialpost.com/2011/04/20/terence-corcoran-let%E2%80%99s-add-fact-to-health-debate/

    The point isn’t that our system doesn’t require significant reform – it does – but that the other systems may have growing problems of their own.

  24. Bob A says:

    We have a medical system mafia and a population of hypochondriacs/junkies whose addiction is reinforced by billions upon billions of drug company advertising programming them to use medical services excessively.

    Count the number of ads on any network nightly news program.
    How many times per night are you told to ‘ask your doctor’.

    We need to ban pharmaceutical advertising on television.

    We need to put limits on the number of new drug approvals for drugs that cost $100,000 and promise a few weeks or months at best, and we need to spend as much money on advertising that the money that goes into these treatments is money that is not available for basic health.

  25. DeDude says:

    The minute you introduce corporate or personal profits into health care you are begging for a disaster. Especially if those profiting have a disproportionate advantage in knowledge about the “product” they can profit from “selling”. It gets even worse because the “costumer” is a rare or one-time user of most specific health product and has no ability to ultimately judge the “quality” of the product (would the patient have died no matter what had been done?).

    Free market capitalism is great when there are a lot of truly competing suppliers to choose from, when the product can easily be judged for price and quality by the customer, and when customers will come back multiple times for the same product. That is not the case for health care and therefore private market forces have been a disaster in that area.

  26. evigod says:

    Please tell me where I can get a physical/checkup in Manhattan for $59 , I need one.

    ~~~

    BR: Walk into an ER – its free.

    We actually do have socialized medicine in the US — its the most expensive free care in the world.

    (The graphic is referring to national average, not the highest cost zip codes in the country)

  27. northendmatt says:

    Did wsm3 mentally block out the part of that chart that showed the US placing 6th or 7th out of 7 in most measures of performance?

  28. rktbrkr says:

    I’m curious how the average income for a US MD compares to these other countries – I’ll take the over on any bets. IMO the AMA has been a wildly successful trade guild restricting the number of US born and educated physicians and forcing competent US students to go overseas to complete their educations and generally restricting the pool of MDs here.

  29. rktbrkr says:

    How can we have a rational health care system when a medical provider charges $1000 for a service and settles for $100 with a governmental entity, settles for $250 with a United Healthcare type insurer and pursues the poor uninsured into BK for the full amount ?

  30. Bill Wilson says:

    This is an interesting conversation for anyone who wants to debate something besides evil profit motives versus Obama’s socialist death panels.

    http://onpoint.wbur.org/2011/04/14/clayton-christensen

  31. OK Avenger says:

    If Ike were around today, he’d be talking about the Medical-Insurance Complex. Simply too many powerful interests that are fat and happy with things as they are. Someone else will pay.

    Buy stock in the Scooter Store…it can’t miss.

  32. drg@brx says:

    Hmm…. the usual commentary but I feel inspired so just to point out a few salient points (something salient to the discussion and knowing what in the hell you’re talking about? Radical I know.)
    1- simply stating the US has the best healthcare system has zero credibility but damn that’s a common refrain when our system is discussed.
    2- the world’s most successful systems (measured by a variety of health indicators and relative cost) may be single payer or not. It doesn’t have that big an impact on outcomes (I’ve been researching and writing about HC systems all over the world for about a decade and actually used the systems in the US, Japan and Belgium).
    3- no system is perfect and they all have accept a basic truism, the wealthy can afford the best care if the local system doesn’t meet their needs. The same is true in the US but the general populace doesn’t want to accept that and instead expects insurance to provide benefits to the end, cost be damned. Cost effective or providing better outcomes no, but we get to feel better because we spent as much as we could!
    4-Those of you who get HC from your employer get a HUGE benefit in the form of tax free benefit costing about 12 to 15K a year (to your employer). Sure, maybe you pay 10% or 20% coinsurance but the cost your employer spends on HC premiums for you and your family? It’s not recognized as income by the IRS or FICA. !@$@ Republican ideas about offering tax credits pale in comparison. There is nothing resembling a level playing field in the US when it comes to getting HC.
    5-Most large employers self-insure to avoid state mandates and control costs but they hire insurance companies to administer the plan. Gets them off the hook as the face of their HC plan with their employees but also forces some tough decisions on them behind the scenes when lifetime and/or annual spend limits on care are hit
    6- And finally, it’s a simple rule of insurance, the larger the pool of risks to be shared the lower the cost. We’ve managed to divide up our insurance into so many @#$%!@ little pools is no wonder it costs an arm and a leg.

  33. DeDude says:

    rktbrbr;

    I can tell you this story from real life. In my city the medical school training program in Endocrinology is approved for 6 training slots for training of new endocrinologists. However, only 3 people are in this training program (although they have lots of qualified candidates that they would like to accept for the remaining 3 slots). Our country already has a lack of endocrinologists and is facing an epidemic of diabetes (because of the epidemic of obesity). So why are they only training half the endocrinologists they are approved for (by those terrible AMA guilds)? Well the hospitals have to pay for these training slots, and they don’t want to pay for any more than 3 slots in endocrinology. That is because endocrinology does not have any of those money making procedures that e.g., interventional cardiology has so the endocrine training slots are not money making slots for the hospitals. As a result our city has 12 (soon to be expanded to 16) training slots for cardiology and only 3 for endocrinology. So once again those efficient market forces have screwed the patients to the wall and thousand of future diabetes patients will be receive sub-optimal treatment and died prematurely – sacrificed on the alter of brainless small gobinment and anti-soc!alism sentiments.

  34. DeD,

    you lay out: ““My view is based upon consumer directed principles where competition thrives, transparency into price and quality exist.”

    There is no way you could create the kind of knowledge needed for consumers to actually make and drive a good old capitalist price/quality squeeze onto health care products. We do not select our health care based on price and quality balances because we are not able to make a qualified judgment on quality and when our health/life is at stake we cannot assign rationale prices….(etc.)”

    esp. “…rather than between con-men and patients with no clue about needs for or quality of products being conned onto them…”

    you know, you should wonder how “We” would know “…As a result you have informed experts of different specialties arguing about the cost-effectiveness of different approaches to care. The more expensive a new procedure or approach is stronger the requirement that it makes a real difference in health outcomes…” was, actually, occurring, if this: “…rather than between con-men and patients with no clue about needs for or quality of products being conned onto them…” is your ‘Default’ position/take on the ‘current scene’..

    hmm?

    you should give a Think on what rktbrkr is alluding to, here: “…the AMA has been a wildly successful trade guild restricting the number…”

    further.. http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=AMA+a+Cartel+that+raises+Medical+Costs

    add’l .. http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=if+you+want+to+make+something+more+Expensive%2C+Subsidize+it+MediCare+and+Health+Care+Cost+Inflation

    really, We might be better off if we took this Premise .. Death By Supermarket: The Fattening, Dumbing Down, and Poisoning of America .. way more seriously..
    http://www.amazon.com/Death-Supermarket-Fattening-Dumbing-Poisoning/dp/1608321150/ref=ntt_at_ep_dpt_4

  35. gman says:

    “Only in America”

    Spend 200% more than the next most expensive system. Have third world live expectancies (43rd)

    People on TeeVee claiming “We have the best system in the world”!

    WMD, Socialism, Muslim…it never ends..

  36. Andy T says:

    Before 1965, health care costs in the US were less than 6% of GDP. For some reason, the began a strong trajectory higher after 1965, hitting 16% of GDP by 2007.

    Wonder what went down around that time?

    ~~~

    BR: Are you blaming this on VietNam, the Great Society, or the Rolling Stones?

  37. socaljoe says:

    Guess who ultimately pays for litigation costs, malpractice insurance, and product liability insurance.

    In other countries these costs are a fraction of ours.

    ~~~

    BR: Malpractice kills 1000s of people per year in the US.

    In terms of costs, it is a teeny/tiny percentage (I belive it was $8 billion out of almost $2 trillion if memory serves me)

    If you waived a wand and made every malpractice case go away, you would have done almost nothing for the cost of healthcare in the US.

  38. socaljoe says:

    Unlike other countries, many Americans refuse to accept a graceful death when the time comes, spending as much in their last year on exotic treatments to delay the inevitable, as they spent in their entire lifetime.

  39. wally says:

    It is also worth noting that all US health insurance companies spend considerable money to avoid paying claims. In fact, probably as much money as it would cost to just pay the claims, straight up.
    They argue that they have to do this because all the other guys do it.
    The strongest argument for single-payer therefore is made by the insurance companies themselves.

  40. bergsten says:

    @Andy T — I would guess that what happened around about 1964 was that the insurance companies put themselves into the middle of each and every medical transaction.

    Before then (whenever “then” was), if you were sick, you called a doctor who came to the house, and you paid him/her directly by cash or check.

    There is no possible way that inserting an intermediary (and a for-profit intermediary at that) into this transaction was going to save anyone money.

  41. philipat says:

    Wash, rinse, repeat:

    1.Throughout the world, heath experts agree, it has been proven that a “Fee for service” model is oxymoronic with cost controls. There needs to be regulation governing procedures and costs, otherwise the medical profession and the healthcare industry will just do and charge what they see fit. Remember, it’s not like buying a car. Most people do not shop around for medical costs for several reasons. Firstly, they don’t have enough knowledge and, secondly,”Someone else is paying”. The latter conclusion is, of course, debatable because ultimately the costs are repflected in the premium, but that discussion is not central here, so let’s leave it alone for now.

    2.Medical insurance costs in the US are higher than elsewhere in the world because they must reflect the costs implicit in Item 1 above AND because existing regulation restricts competition, for instance across State lines. It is also the case in the US that insurers refuse patients with “Pre-existing conditions”. Elsewhere in the world, the medical care infrastructure incorporates the concept of universal risk pools, which is actually what insurance is intended to be and can be achieved in many ways without the “Moral hazard” of freeloaders only buying insurance AFTER being diagnosed with a serious condition.

    3.US physicians charge too much because of Item 1 above and also because they must pay excessive insurance premia to cover the very real risk of malpractise suits, the vast majority of which are frivolous. In the case of (In this context) high risk specialties, for instance a surgeon, the annual premia can reach six figures. This cost has to be built into overheads costs and it also forces US physicians to practise a highly defensive type of medicine. This means running every test known to mankind and prescribing the latest brand name medicines becuase, if they do not, then the friendly lawyer at a location near you will use this in a malpractise suit. Nobody is saying that a genuine case of malpractise should not be pursued but analysis after analysis shows that the vast majority of malpractise suits in the US are frivolous, for one reason or another.

    4. US MNC Big Pharma makes about 80% of global profits in the US market alone and yet pays virtually no US Federal taxes. This is for several reasons. Firstly, they get tax credits for “Research”, most of which costs are, in fact “Development”. SO most of the research gets done in the US because it is largely free. The real money in pharmaceuticals is in the “Active” patented raw materials, NONE of which are manufactured in the US. These are manufactured in “Tax havens” such as (Previously) Puerto Rico and now Ireland, Singapore etc. These active raw materials may cost, say, USD 10/Kilo to manufacture in Singapore then get shipped to local affilaites in countries around the world, including the US, for, say USD 10,000/Kilo (That is a realistic example incidentally). In this way, USD 9,990 remains in Singapore where there is an extended tax holiday. This is called “Transfer pricing” and it amounts to tax evasion because the healthcare systems of all recipient countries, including the US, are paying over the top to import such materials and, of course, the inflated cost reduces profits in such recipient countries, again including the US, which reduces or eliminates profits and therefore local taxes, again including in the US. The Big Pharma lobby is very powerful in defence of its practises and is a major contributor to political causes. Of course, MOST large US Companies pay very little tax in the US so the taxation component implicit above is actually of a more general concern, but Big Pharma provides a very good example.
    Many drugs in Canada sell for a fraction of the US cost because the active raw materials are manufactured in Ireland etc., imported into the US at a loss and manufactured into pills, which are then exported to Canada at a further loss (Single payer system so what can we do, prices are fixed at realistic levels by the Canadian Government. This is bad according to the right wing doctrine). The same pills are sold in the US at 4X the cost. SO why not start by allowing re-importation of US MANUFACTURED drugs from wherever. There are, after all no safety issues (Americans seem to believe that only the US is capable of manufacturing anything properly, except of course that hardly anything is actually manufactured in the US any longer) because these drugs are indeed manufactured in the US. If I were a US citizen, I would buy all my medicines in Canada, generic versions wherever possible, to take advantage of the irrational cost differentials resulting from more common sense and less political corruption north of the border.

    I believe that by adressing the aboveissues, none of which is actually rocket science, the cost of healthcare could quite easily be normalised in the US. The potential savings are enormous. As this chart demonstrates the idea that US healthcare is the best in the world is an idea supported not by facts but by Billions of Dollars on K-Street.

  42. bergsten says:

    One might also note the irony of the site that “created” this graphic is called “Medical Coding and Billing” which promotes (you really have to sit down for this one) colleges that teach, well, medical coding and billing.

    Does anyone need any other answer as to why medical care is so expensive?

  43. Andy T says:

    bergsten.

    Yes. Also, the Medicare Act was signed into law in 1965. Indeed, when you introduce an intermediary into the equation, whether it be the government or an insurance company, COST goes up.

    I’m pretty sure the best “solution” for most individuals is to have only “Catastrophic Insurance” with a high deductible and low premium. Insurance should only be for the things that might seriously harm you. Everything else should be just out of pocket payments direct from the user of the service to the provider of the service. Just cut out the middleman for a majority of the “health care” transactions.

  44. Andy T says:

    bergsten @8.10 PM

    That is classic.

  45. TripleB says:

    I heard an anecdote last weekend – friend of a friend’s 90-year old father underwent about $500k in procedures (bypass surgery then additional procedures due to post-surgery complications). All paid by you, the taxpayer.

    Why are we performing bypass operations on 90 year olds?

  46. dmlopr says:

    The top 5% eat 50% of the money on one of the plans I do numbers on. Wish I could disclose more.

    DistributionMembersTotal Costs Cost Distribution
    1% 279 $ 71,831,949 23.5%
    2-5% 1,115 $ 82,692,893 27.0%
    6-15% 2,789 $ 76,761,227 25.1%
    16-30% 4,183 $ 46,042,293 15.0%
    31-60% 8,365 $ 26,050,017 8.5%
    61-100% 11,154 $ 2,825,606 0.9%

    Sorry for the crappy formatting.

  47. victor says:

    Medicare’s unfunded liability extends as far as the eye can see into the next generations; I see figures put at $60 trillion, even $100 trillion but who’s counting? My Norwegian US naturalized citizen friend (70) just had prostate cancer surgery paid by Medicare, a cool $64,000 plus misc. He calmly told me that he had gone to Oslo where he was seen by VERY competent doc’c who told him: we’d do nothing here, although you are fully eligible for our care, just come back every year for a check-up. I hear that most Medicare costs are incurred in the last 9 months of seniors lives, just like my mother’s. Finally, 50% of health care costs in the US are ALREADY incurred and run by Government: Medicare, Medicaid and Vet’s . This is another daunting US problem besides: Tax system, Immigration, Energy, Deficit, Education….stalemate/paralysis in DC…as for the rest of us working stiffs: pay, pay, pay.. the wealthy don’t really care much, it’s nothing to them, probably tax deducible anyway…obesity, smoking, drugs, diabetes, illegals all take a toll too…

  48. harryhope says:

    One way to understand why US healthcare costs so much is to take a look at how other countries deliver at a lower cost without a loss in quality. Here are a few examples from France where I live.

    Like the rest of the so-called developed world in France we buy our prescription pills by the machine packaged box. In the US a very highly educated and paid individual spends an entire working day counting pills, putting them in bottles and labeling the bottles. Why are the US pharmacies operating like they’re in a third world nation? Presumably cost efficiency is not a consideration.

    In France every doctor is not a specialist. The primary care physician is a GP. French GPs are BTW excellent. Specialists for the most part are consultants and relatively small in number. They diagnose and prescribe a course of treatment. This is conveyed to the GP by letter and phone. Treatment is provided by the GP. This significantly reduces the number of office visits and cost, not to mention the cost of specialization. The effect from what I can see is better care. Multiple doctors are not “treating” the patient in isolation. The primary care physician sees the whole patient and all ongoing treatment. Even where, for example, a cardiologist provides ongoing care (in my case a deteriorating irregular heartbeat) the cardiologist and GP work together to make a decision (in my case to have a pacemaker operation).

    My spinal RMI cost $175 in France and that included a consultation with a radiologist 15 minutes later using state of the art 3-D imagry and 2 DVDs to give to my doctors. The comparable US cost is 100+ times more. Why? I obtained my MRI at a for profit hospital owned reportedly by a US healthcare organization.

    In France there were multiple changing rooms, two technicians, and a very quick sequence of MRIs provided for the many lined up patients. In the US I sat alone in a waiting room for twenty minutes listening to a technician chat on the phone about her son’s summer camp. She finally went through the procedure and I left via the empty waiting room.

    My point is there’s no need to theorize about the high cost of US healthcare. Go to places that do it at far less cost with better results and learn how they do it.

  49. HEHEHE says:

    I am of a Libertarian bent on most things, but they should just nationalize health care and start rationing. The biggest injustice in all of this is the financial ruin brought on people because they lost the “health lottery” and get some disease or suffer some injury. If collectively it was decided I get a $50,000 cancer treatment with a 60% success rate instead of some state of the art $2M treatment with an 80% success rate I could live with it so long as some kids parents don’t get bankrupted because she developed some genetic disease or some mope gets denied coverage for a pre-existing condition. The insurance companies and trial lawyer lobbyists prefer the current sh*tty system they’ve developed and they have way too much sway for there ever to be a “free market” in healthcare in this country.

    BTW the f’g insurance industry puts the finance industry to shame when in comes shady behavior. They’ll collect the premiums but deny claims left and right and hope the insureds don’t have the energy to fight them.

  50. rktbrkr says:

    OK Avenger, funny comment about Scooter store…they “guarantee” they can get you the scooter for free – thru medicare or whatever I assume, their ads run continously on CNBC

    there were traffic jams of scooter vehicles in Disney world when I was down there, ditto the local Walmart – a lot of the riders weere just big fat slobs.If you want to shorten your lifespan and quality of life just hop into a scooter

  51. rktbrkr says:

    Mark hoffer, thanks for excellent article on how AMA med school cartel has manipulated the supply of MDs in the US. MDs here make 40% more than in comparable systems, that certainly jumpstarts runaway us medical costs

    Compare MDs to other US professions. Ever call up a lawyer, CPA, engineer and be told “we aren’t accepting new clients” or “our next available time is the June 18″?

  52. techy says:

    fixes are simple:

    1. reduce cost of medical education, start more medical colleges …. or import highly qualified foreign doctors..
    2. limit liability to promote small clinic private practice.
    3. limit spending on a terminally ill person…. even if one in 100,000 person gets a treatment costing 5 million, its going to be subsidized by everyone.

    India has the best system in the world, government run hospitals are only for dirt poor people(with bad quality and limited budget)….there are so many doctors/nurses that it cost next to nothing for most things…you dont need no frkin insurance…

    but this is all not going to happen in USA….lobbyist will make sure those making money in the current system will work to keep status quo

    and the population….oh well… 50% of them just want laws based on the bible…and they want to put bill boards that blacks are bad. Another 10% are stupid independents who dont even know the real politics in this country.

    good luck getting anything done which will benefit the sheeples..

  53. Chad says:

    Only mentioned by one or two intelligent commenters is the fact that there is no free market in medicine. It just isn’t possible given the type of services being provided.

    U.S. general practitioners get paid very reasonable salaries, but specialists get paid foolishly high salaries.

    Breif story on one reason why healthcare expenses are high: A nurse friend breaks her foot playing sports. She is 90% sure it is broken, so when the doctor confirms it with x-rays she isn’t surprised. However, the doctor then suggests she get an MRI. She tells the doctor he is an idiot and leaves. Why did the doctor want an MRI (which isn’t as good for examining bone breaks as an x-ray is)? Because it would have paid him more. So, this is a system problem and a customer problem (customers need to be better educated).

  54. rktbrkr says:

    Andy T…We’re a nation of Chauncey Gardners brainwashed by perfect TV docs like Ben Casey, Dr Kildare and most of all Miraculous Welby. The AMA couldn’t have bought better PR than they got for free from these 60s shows. Now that we’re being destroyed by healthcare costs we get House the entertainingly flawed junkie

  55. UncleMilty says:

    I’m curious to hear why we are 2x more expensive. My guess is that we consume a lot more care per person, and pay higher tort/defensive medicine costs. Our wait times are shorter and we use specialists and doctors more than family practice and NPs/PAs compared to other countries. If we’re really paying 2x more, are our doctors making 2x more? Drug companies and HMOs haven’t exactly been on fire lately. Their net margins are probably pretty similar to a lot of other businesses. Who’s getting rich on healthcare?

    Also, it can’t help that price signals have been compeltely shut out of the marketplace. Could you imagine buying a car or house or TV or anything else and not even discussing price with the salesman?

    Carpe Deim has some interesting posts on a potential reason why. Here’s one:

    http://mjperry.blogspot.com/2009/06/chart-of-day-canada-vs-us-med-equipment.html

  56. rktbrkr says:

    A friend of mine needed an expensive procedure and his health insurer agreed to pick up the deductible portion if he would have the procedure done in a less expensive location (Johns Hopkins Baltimore instead of a NYC biggie)

    Does anyone know if United Healthcare type insurers pay for out of country meds & treatments?

  57. DeDude says:

    MEH @ 7:11 PM

    If the doctors in US make an average of $100,000 per year more than they do in Europe and AMA has 250,000 members then the excess cost from doctor compensation comes to $25 billion. That quite frankly is a spit in the bucket and would not explain the absurd excess spending on medical care in this country (S4000 x 350 million people = $1400 billion). So if you bother to look at the facts then the horrible unions are not to blame for this one either.

  58. Greg0658 says:

    “90-year old father underwent about $500k in procedures”
    .. you do understand that every living human, dog & cat in a no kill shelter & gold fish in a yuppies pond (me) is money in someones pocket
    .. OUR TROUBLE as the USA is TO MUCH floats away outside our circle

    those hospital employees – if they only bought made in the usa products and took usa vacations … I know there goes an anti-free trader – yepper .. Wall Street mechanism for growth = grab those savings & invest in emerging economies = growth potential — FOR SOMEONE

  59. Greg0658 says:

    rant off .. I do wonder if the 90 year old considers who is not getting cared for (a 1 year old) because the doctors time is being allocated to him …
    (I wanted to bang this drum yesterday – was having issues with the www)
    ie I was wondering if there are figures of how many Doctors, RNs & related tradesman are trained with government military training, GI bills & government grants without the military service?
    That ratio of training with your own (or parents) money vs government money?

  60. DeDude says:

    Andy T;

    “when you introduce an intermediary into the equation, whether it be the government or an insurance company, COST goes up”

    So that is why uninsured people pay 3-10 times as much for a hospital stay as those with Medicare do. Amazing how fast you can slip and fall on your @ss, when you skate on the ice of dogmatic ideologogery.

  61. DeDude says:

    Dmlopr;

    “The top 5% eat 50% of the money on one of the plans I do numbers on. Wish I could disclose more”

    That is the nature of insurance. Most people don’t use it and pay much more than they get back – but for those few unlucky that do get in trouble it saves them from complete financial disaster.

  62. Greg0658 says:

    a 3fer (if OK) .. I trained as an volunteer EMT (top of the class w/my GI-Bill) did that as well as scheduler – till I pushed for & got paid staff to fill schedule issues

    “the cardiologist and GP work together to make a decision”

    I understand I need more education to work on the populace in a hospital setting …
    (this is me talking for the benefit of the discussion) .. but as a 54yo with COPD issues (I’m not dropping over dead -yet) – but to go further into debt (GI-Bill educations still cost you $) without a promise of work – FU capitalists – I’m over the hill and I lived the dream – and thank you for the opportunity to live and to rant – but take care of your own dad .. (or draft me) (wait can I end up in jail for complications) (forget that stupid draft idea)

  63. Kort says:

    Obese people are killing themselves and killing our wallets.

  64. VennData says:

    Mitt Romney Haunted By Past Of Trying To Help Uninsured Sick People

    http://www.theonion.com/articles/mitt-romney-haunted-by-past-of-trying-to-help-unin,20097/

    Any self-respecting GOPer would hate this Romney guy.

  65. VennData says:

    (GOP slogan incoming….) Lawyers Lawyers Lawyers lawyers! it’s all the fault of lawyers!

    …except the DATA shows otherwise, malpractice costs are only 0.4%

    http://www.cbo.gov/ftpdocs/71xx/doc7174/04-28-MedicalMalpractice.pdf

    The GOP should change their call letters to KYL… because of the lies they use to cover they data…

    http://www.cnn.com/2011/OPINION/04/15/avlon.kyl.truth/index.html?eref=mrss_igoogle_cnn

    …at least Kyl admits it. But the GOP genuflecter’s brains are so full of their GOP-marketed excuses they can’t even think, let alone understand the facts. One brightly-colored, un-signed, unsubstantiated, large-font email is all they need to pronounce on policy.

    Homeschooling has consequences.

  66. willid3 says:

    not sure why some one is surprised that 5% of the policy holders have 50% of the claims. thats as some said is how insurance works. simple version of insurance. the collect premiums, they invest it, to pay claims and to make money. they control claims by only offering coverage to a limited number of people (those who they calculate will have the fewest claims for the least amount of money), and only for a select set of events (again to keep claims cost down), and they look at the numbers to ensure that they have a lot fewer claims to policy holders as possible (they really need to have a lot premiums collected and investment income compared to claims and other costs to make money. failure to do this will end up with the collapse of the insurance company and no claims getting paid except those that the state associate or government will cover). otherwise they would have to charge you as much as the claims would be, which would defeat the purpose of insurance. almost sounds like they are betting with you as to how much in claims you will make doesn’t it? and in a way it is.
    our problem is we have the fee for service system. and those who buy the service don’t have enough knowledge (and can’t) to make rational choices. and there is the stress of time. little of it. and this is life and death choice.
    the ‘health system’ we have isn’t set up control costs (it only did it for a while). and we have monopolies in providers (doctors etc) and insurers. neither have any interest in controlling costs any more. some doctors have found out that they can make more money by just increasing the number of services they offer (which takes the threat of malpractice suits into a money maker as they can now increase their incomes). and insurers have new ways to control claims. they deny them as long as possible. or they cancel the policy. or they reduce coverage. or all of them.
    the studies of the costs across the country show that there are hot spots in states. ad its not always the big city. but it always been where the local providers have almost all banded together, and they own the hospitals and labs. and they seem to always proscribe the most expensive solutions for medical conditions

  67. carpediem0496 says:

    There have been a number of good comments here.

    I don’t understand why so many people say “we cannot understand” our medical condition and make good decisions. I don’t understand why so many think that rationing or decisions on end-of-life care should be left to the government. I don’t understand why so many think that we have a free market in healthcare in the US.

    Of course, a key inflection point on the increase in healthcare costs was in 1965 with the passage of Medicare as part of Johnson’s Great Society programs. Government interference has distorted the cost and delivery of healthcare in the US.

    In the 1950s, insurance was insurance. The doctor came to your home and you paid for the service. Insurance was for catestrophic events. Now everything gets processed through a third party payer (i.e. insurance company). Of course, this costs more. In addition, it adds to the illusion that the service renderred is “free”. Let insurance be insurance again. Lots of people would stop going to the doctor for a runny nose because it’s “free” (and we all know there is no free lunch).

    The government has exempted much of healthcare from the Robinson-Patman Act, which prevents price discrimination. This allows healthcare providers to shift the costs from those who can’t or won’t pay to those who can. This is BS.

    Tort reform could save money. Someone mentioned getting a CAT scan because he fell off his rollerblades. It’s CYA medicine.

    If we followed consumer directed principles, there would be many changes. Price and quality for doctors and hospitals would benefit both cost and the quality of care.

    HSAs would let people accumulate funds for end-of-life care. Why should we as a society pay for heart surgery for a 100 year old person? We should not. However, if such a person can pay for it and wants to do so, he should be able to do so. No government bureaucrat need be involved in the decision.

    No system is perfect and there will be unequal outcomes whether medicine is driven by consumer choice or by government bureaucrats in a socialized system. However, this is America where life, liberty and the pursuit of happiness are left to the individual to define. I favor a consumer driven system.

  68. DeDude says:

    In order for consumers and market forces to inflict their famous positive effects on price and quality of a product, these conditions must be present:

    1. The costumer must have the ability to evaluate and judge the price and quality of the product before the purchase is done (otherwise they will not push vendors to provide the best quality and the lowest prices).

    2. There must be a substantial number of different vendors available who set their prices independently (otherwise vendors can ignore the costumers push for quality products and low prices).

    3. The costumer must be able to evaluate if (s)he actually got a quality product (otherwise the vendor may get away with “faking” quality).

    4. The costumer must need the product repeatedly (otherwise the vendor may be able to fake quality in their advertisements and never be punished by lack of repeat business).

    5. The vendor must not be able to hide under a new name (otherwise the vendor may be able to avoid the punishment of a bad reputation).

    In todays complicated world it is becoming more rare that all of these conditions can be fulfilled. As a result we se more examples of failures in the old principle of “the invisible hand”. Free market forces are failing because the conditions for their success are eroding away from under them. Health care is just one example of that.

  69. VennData says:

    I’m a single issue voter and nothing is more important than the Doctor/Consumer relationship…

    http://www.nytimes.com/2011/04/22/opinion/22krugman.html

  70. kalonso says:

    Methodology is always the problem. None is explained here.

    It appears that all but the outcome graphics are based on musings at http://theincidentaleconomist.com/wordpress/what-makes-the-us-health-care-system-so-expensive-introduction/. Correlations provided are below those routinely accepted in science.

    I await details of the methodology employed.

  71. arrian says:

    My point is there’s no need to theorize about the high cost of US healthcare. Go to places that do it at far less cost with better results and learn how they do it.

    ———

    “France’s health care system is inclusive, democratic and well-organized—yet 70 percent of its population is dissatisfied with their coverage. In April, the main health consumers’ association, Collectif Interassociatif Sur la Santé (CISS) published the results of a national study, including that staggering level of dissastisfaction. The CISS explained that there was growing fear among the populace regarding the financial and social burdens of the health care system. While the French are particularly adept at complaining, there is real cause for concern.”

    http://www.worldpolicy.org/blog/health-care-france-3000-year

    Healthcare Costs Continue to Rise, with France Showing the Greatest Increases – and Governments and Pharma Companies Most Often Cited as Responsible

    In every country studied, except Japan, the majority of respondents report seeing healthcare costs rise over the last year. France shows the most dramatic increases, with 88% of consumers saying that healthcare costs have gone up in the past 12 months.

    http://www.world.xorte.com/0,6,Most-Consumers-Around-the-World-Are-Satisfied-with-Their-Healthcare-Coverage-Though-See-Costs-Increasing,13423.html

  72. Excellent discussion

    Thank you for keeping it (mostly) fact based and so very intelligent

  73. Greg0658 says:

    “Homeschooling has consequences.” I gotta ditto with a high5

  74. NotQuiteSo says:

    @carpediem0496 nails it:

    “Quality, tort costs, regulatory costs, cost shifting, third party payers, technological advances and exemption from the Robinson Patman Act (which exempts many healthcare participants thereby permitting price discrimination), among other things, are among the many reasons why healthcare costs are higher in America.”

    Reordered by what I believe are the biggest cost drivers over other developed countries, I’d go with third party payers (the agency problem – “it’s free!”), cost shifting, quality, technological advances, regulatory costs and tort costs.

    Importantly, the biggest cost driver for the uninsured is the Robinson Patman Act exemption, which allows health care providers to post a retail price of, say, $1000 for something they actually only charge the insured $100 for. If you have insurance, great. If you don’t, they’ll come after you for the full $1000. See http://www.bloomberg.com/news/2011-03-24/ultrasound-at-59-490-is-outrage-in-aetna-claim-against-doctors.html, describing an 80,000% difference in service price based on insurance status.

    @apataki, we are fat and we are violent. But they’re almost as fat and violent in the UK, and they have similar outcomes at half the price.

  75. HarleyHoward says:

    A recent example:

    I had a motorcycle accident last August, broke and fractured my tibia. The surgeon pounded a rod in from my knee down to my ankle and secured it with 4 screws. I only stayed in the hospital overnight. The bill was $60,000. Six months later, one of the screws in my ankle started to unscrew and had to be removed.

    This procedure used to be done as an office out-patient procedure – approximately $500. Last week I had the screw removed as a surgical out-patient at the hospital, I was in “surgery” for 10 minutes (1/2 inch cut, unscrew, 2 stitches). Cost $11,000 ($9,800 of which went to the hospital)!

    Why? Lawsuits and medical malpractice insurance. Insurance carrier now requires doctor to only do procedure in hospital setting! Who paid? Me – $3,000 deductible and my insurance $$8,000 (less the premiums I’m paying).

  76. carpediem0496 says:

    *BR: Extensive Data has shown that the Tort issue is insignificant aspect to the total cost of care on the US>*

    I am sure the studies were done by attorneys – perhaps John Edwards. There is an ambulance chasing industry. It advertises on TV, which is not inexpensive. The goal is in part extortion – settlement without admission of wrongdoing is weighed against the cost of defense and the uncertainty of litigation. This tells you suing pays. Doctors quit practicing over this (obstetrics is among the worst). I am sure that judgments over the total cost of healthcare is a relatively small percent. I don’t know the number. But what about all of the needless tests and procedures, cost of malpractice insurance and cost of defense against frivolous claims? The aggregate costs, if fully captured, are material. Wouldn’t it be nice if we could redeploy the efforts of lawyers and accountants dedicated to chicanery in medicine and taxes to something productive?

    ~~~

    BR: Your comments are false, foolish and foul.

    This site is about getting to reality, reaching the objective truth. Your statements make it clear that not only is this laudable goal unimportant to you, but indeed, you are actively working towards the opposite result.

    That makes you, sir, an ass in my book.

  77. shirleyb77 says:

    carpediem0496–You’re right on about tort reform. Regarding medical malpractice, it limits the amount of punitive damages in medical malfeasance cases without restricting the awards for lost work, pain and suffering and medical costs. The punitive damages are what often skyrocket, and it’s what creates the malpractice insurance crisis of the 70s, when many malpractice insurers went out of business or stopped offering the coverage.

    I’m employed by a medical malpractice insurer, and I can tell you that the trial lawyer associations in every state spend heavily to try to defeat the tort reform legislation in every state that has it in any form. This is where many personal injury lawyers make huge fees and they push relentlessly to remove all barriers to their personal profits.

    Frivolous lawsuits in medicine have had a definite influence in medical costs. Having said that, however, so has the decrease in the quality of medical care that many previous posts have detailed accurately. This is clearly evident in even a casual review of malpractice cases. There are far too many instances of patients fallilng through the cracks–misses diagnosis; failure to follow up on negative test results; doctors failing to communicate clearly or at all with their patients; medication errors–the list goes on and on.

    The current medical care system delivers increasingly poorer results for ever higher cost. Skyrocketing costs of pharmaceuticals is a large factor here, and completely unsupportable in the light of the bloated profits enjoyed by big pharma. Taken together with the ever-eroding performance of new pharmaceuticals on the market and corresponding health threats by side effects that are worse than the condition being treated by the drugs, the pharmaceutical industry has a lot to answer for.

    The system is badly broken and needs strong intervention. Where that will come from is problematic–the AMA and big pharma have powerful and effective lobbies in Washington. Grass roots, as mentioned above, must have something to work with. As a long-time proponent and client of alternative or complementary healing methods, my health is much better and my costs are far lower than the average consumer of standard Western medicine. While using these methods requires more attention and some personal education, the benefits far outweigh the costs. There is already a trend toward alternative healthcare methods that is having a positive effect. From the medical malpractice perspective, many health care providers are incorporating at least some of these practices to great effect. Movement of this kind may be the best single way to address the healthcare crisis–just go somewhere else.

  78. Diogenes says:

    I think one problem with US health care is redundant insurance coverage.

    An insurance pool equal to the US population of 310 million would be much more practical than pools of 5 workers here, 200 workers there, 50 workers there, and so on and so on. The risk and cost of the smaller pools is significantly higher.

  79. JimRino says:

    I’d must like to get a doctor in my neighborhood who isn’t “booked up” and “Not Taking New Patients”!
    This is the outrage, where you can’t even Get a Doctor from your HMO.
    There must be a shortage of doctors.

  80. JimRino says:

    DeDuke makes some valid points.
    If you allow the insurance industry to set up multi-state monopoly you will never get prices under control. If you allow pharma profits to grow 20% a year, you will never control costs.

    If Democrats attempt to address these issues Polosi and Reid will be villainized, along with Obama.
    As they were in the last election. If they do their jobs, the paid off right will scream with rage.
    This is the new Ineffective US Democracy.
    As long as you vote Republican You will have Expensive Healthcare for the top 1% and soon No Healthcare for most Americans.

  81. Lugnut says:

    BR said: “In terms of costs, it is a teeny/tiny percentage (I belive it was $8 billion out of almost $2 trillion if memory serves me)

    If you waived a wand and made every malpractice case go away, you would have done almost nothing for the cost of healthcare in the US.”

    That completely ignores the knock on cost effects of malpractice exposure; the high cost of medical liability insurance, the parade of expensive tests doctors have been indoctrinated to prescribe, merely for defensive liability purposes, the amount of medical facility/hospital paperwork and policy adminstration aimed at mitigating procedural liability. Its enormous.

    Other than that, everyone is at fault, the consumer public, the lawyers, the hospitals, the insurance companies, the big pharma companies, the doctors, the government. Everyone eats a big slice of blame. Once we moved to employer administered healthcare (with the governement giving preferential tax treatment to employer programs), and the carriers becmoing the primary payers instead of the patient, it was all over from there. Over the ensuing 50+ its grown like a giant malignant tumor on our society and has now nearly consumed its host.

  82. DeDude says:

    NotQuiteSo;

    “the biggest cost drivers over other developed countries, I’d go with third party payers (the agency problem – “it’s free!”)”

    I would have to say: “not quite so”. Our system of “set dollar” co-pays and % based co-pays actually leaves the patients with substantially larger self-financing of health care than in those other countries. Fact is that when you feel your life or future well-being is at stake the cost is not considered – even if it means you will bankrupt yourself. Think about it for a minute; doc says your PSA is over 10 and you probably have prostate cancer, they need to do this 80K operation to save you – even if you had to pay every dime of it yourself, would you say: “nah too expensive, let it grow”? People will (and do) bankrupt themselves before they say no to a treatment peddled to them by the medical-industrial complex. That is why over-treatment can only be controlled by “death panels” – whether created by government of by private health insurance companies.

  83. NotQuiteSo says:

    @DeDude -

    Yes, you’re right, faced with a catastrophic illness we will usually spend whatever it takes. That’s not where the agency problem does its damage in everyday medical costs, though. An example is from an earlier comment by Chad:

    “A nurse friend breaks her foot playing sports. She is 90% sure it is broken, so when the doctor confirms it with x-rays she isn’t surprised. However, the doctor then suggests she get an MRI. She tells the doctor he is an idiot and leaves. Why did the doctor want an MRI (which isn’t as good for examining bone breaks as an x-ray is)? Because it would have paid him more. So, this is a system problem and a customer problem (customers need to be better educated.”

    We can’t know why the doctor recommended an unnecessary MRI, but we can easily imagine a less sophisticated but well-insured consumer saying “sure” and going ahead with it.

    The problem also comes up with catastrophic illnesses. Imagine a cancer treatment that improves outcomes by a month or two. Many of us would pay for an extra month no matter the cost. I imagine many of us, though, wouldn’t, especially if it meant bankrupting the family, especially if we were somewhere past 80. Insured patients don’t have to make that choice. Most of us agree that’s good – bankruptcy or a lost month is a cruel choice. But it drives cost.

  84. willid3 says:

    not sure that insured or not make a difference . if you your life is at stake, you will do what ever you can to save it. unless you are told it will cost millions. but we always over look one thing . doctors don’t tell you how much its going to cost. in fact they don’t know. they do know that proscribing that MRI can increase their incomes (especially if they own the lab that does it. or own part of it). and some doctors will actually not proscribe it all unless you ask for it. and even then they usually won’t unless they get some thing from it (as almost all insurance companies know about this. and have put it into their contracts that the doctor has to explain why they proscribed an MRI. insurers aren’t that dumb. they do learn. they just can’t over come a different monopolies power in the market).
    and we don’t know that the MRI is unneeded either. we might think it is, but maybe the doctor knows some thing we don’t. thats why they went to school for so long, and paid so much it, and have such large student loans.
    what it seems is that some are trying to use optional health care market (think optional cosmetic plastic surgery) and trying to apply that to emergency and standard health care. they aren’t the same .
    and tort reform won’t help much. my state did it. it didn’t reduce health care costs much if any. anmd its pretty stringent
    whats not noted when talking about malpractice insurance is that less 70% of the costs are caused by less than 6% of doctors. and low and behold you discover that the state board that is suppose to police them. doesn’t actually do much unless they commit a felony. some times

  85. OK Avenger says:

    I would gladly trade our system for what they have in Canada, UK, France, Australia, New Zealand, or the Netherlands. If that makes me a socialist…so be it.

  86. carpediem0496 says:

    *BR: This site is about getting to reality, reaching the objective truth. *

    Regarding tort reform, I would like to see studies that show lawyers do not add to the cost of healthcare. My reading indicates that studies that make such claims are highly selective in what is attributed to legal action.

    My point, while tongue in cheek about John Edwards and the ambulance chasing industry (and both exist), that frivolous lawsuits impact behavior and therefore costs is valid. It seems as if shirleyb77, who works for a medical malpractice insurer, agrees.

    A Jackson Healthcare study places the annual costs at $650 to $850 billion per year and attributes 26% of total healthcare costs to defensive medicine. That is certainly not chump change. [BR: That dollar figure is the result of a survey of health care professionals, and not an actual measurement].

    Here are a couple of studies that address the issue. These indicate that Medical Malpractice Policy (http://www.kaiseredu.org/Issue-Modules/Medical-Malpractice-Policy/Background-Brief.aspx) Physician Study: Quantifying the Cost of Defensive Medicine (http://www.jacksonhealthcare.com/healthcare-research/healthcare-costs-defensive-medicine-study.aspx)

    ~~~

    BR: They do add to the cost — about 1 cent per $10,000. (This does not include the lives that are saved by forcing needed fixes when the industry is forced to remove incompetent hospitals and doctors). And citing a poll as to actual costs is simply ridiculous — show me some real data as to the costs, not bullshit opinion polls

    Your focus on garbage data is likely why you are focused on what every other study that measures actual costs to be an insignificant number in the total scheme of health care costs.

    Why you want to eliminate anyone’s constitutional right to seek redress in a public court wont be changed until someone close to you is the subject of malpractice. I wouldn’t wish that on anyone, but i do wish you better understood the damage that could be done.

  87. December says:

    As best you can, with an objective eye, take a stroll through your local hospital Intensive Care Unit and you may have a surreal experience. You may witness a nation of people that are afraid of dying, unable to look mortality in the eye? I’m not exactly sure why it’s happening. Sometimes it’s the culture of the medical providers that inspire continued care and sometimes it’s the families that are insisting that everything be done for their ailing, elderly family member.

    As a critical care nurse for decades, I tended to those elderly, who are the majority, in those beds. They are intubated, on ventilators, on sedation, with feeding tubes, and hand restraints. They are dazed, and moaning, with bedsores, not recognizing their family members, or recognizing and not understanding. Another diagnostic exam, another CT scan, an MRI, a cardiac cath, more blood to the labs. It’s thousands, millions, trillions of dollars in the last few months of a life. It’s called “futility” care and that is what we do so wrong in this country.

  88. dss says:

    From the Washington Post:

    ” The key difference is that foreign health insurance plans exist only to pay people’s medical bills, not to make a profit. The United States is the only developed country that lets insurance companies profit from basic health coverage. ”

    “Which, in turn, punctures the most persistent myth of all: that America has “the finest health care” in the world. We don’t. In terms of results, almost all advanced countries have better national health statistics than the United States does. In terms of finance, we force 700,000 Americans into bankruptcy each year because of medical bills. In France, the number of medical bankruptcies is zero. Britain: zero. Japan: zero. Germany: zero.

    Given our remarkable medical assets — the best-educated doctors and nurses, the most advanced hospitals, world-class research — the United States could be, and should be, the best in the world. To get there, though, we have to be willing to learn some lessons about health-care administration from the other industrialized democracies.

    T.R. Reid, a former Washington Post reporter, is the author of “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care,” to be published Monday.

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    If you want to get a handle on what is wrong with the US health care system I urge you to read this article:

    5 Myths About Health Care Around the World

    T.R. Reid is

  89. DeDude says:

    If we can get back to the fact-based debate regarding tort reform, then it has actually been tried and just like trickle down economics it didn’t work. Not only did the medical procedures and cost not change much, the cost of malpractice insurance didn’t change much after tort reform. It turns out that these dreaded “punitive damages” are not a real driver of what doctors do and not the real cost in malpractice awards.

    The MRI after x-ray example above is great. There is a very small but real chance that a MRI can reveal a minor issue not revealed by an x-ray, and an even smaller chance that such a minor issue could develop into a problem. A cool cost-effectiveness analysis would suggest that doing the MRI would be stupid and wasteful. The doctor wanted to do it anyway and in a tort reform state he would have said it was medically needed (got to be absolutely sure) in a non-tort reform state he would have said he needed to guard against a suit (just in case just in case). The fact is that whether he acknowledge it or not that the incentive to do it is making more money.

    Personally I think we need tort reform but not for its minimal effects on health cost. In some public hospitals there are a small number of patients that view doctors as a lottery ticket, and as a result many doctors begin to have a bit of a paranoid view of the patients as predators. That is not a healthy doctor/patient relationship and it is bad for medicine. If we want to get rid of excessive procedures and medicines tort reform has been proven ineffective and the way to go is to remove the doctors and hospitals incentives to conduct them (when not needed). It is not that hard if you care to look at what other countries do.

  90. DeDude says:

    PS: As a matter of fact, if those infantile clowns that crawl up in fetal position and scream SOC!ALISM whenever somebody start talking about government doing something other than waging war, would leave the room, then the high cost health care problem could be fixed in a few minutes.

  91. farmera1 says:

    When people are paid for piece work / paid by procedure, as doctors are they do lots of pieces/procedures.

    In the last 5 years I’ve been told by doctors I needed two major procedures: Back surgery and a joint replacement. After traveling to Mayo Clinic in MN, I had neither and through exercise and reducing my running (not eliminating) I’m fine. So I’m very very glad I didn’t follow the local doctors advice. Saved the system $100,000s and feel fine.

    Mayo Clinic doesn’t pay their doctors on a piece work basis. They are paid salaries. They are much less eager to cut on people.

    It is now illegal to import prescription drugs from Canada. It is illegal for the US government to negotiate prices with the drug companies. These prescriptions are physically made in the US. Exported to Canada and sold much cheaper there than they are in the US. Why, because the Canadian government negotiates price with the pharma companies. In buying food for poor mothers, the state governments didn’t negotiate with infant formula companies until about 20 years ago. Several states started to get together and put the business out for bid. The prices dropped by about 75% immediately. It would work basically the same for prescription drugs.

    Many peoples only option in the US is to go to the emergency room. Talk about a dumb inefficient health care delivery system. By the way California and Texas have
    limits on liability suits. Didn’t impact the cost of health care delivery.

    It would be hard to develop a worse, more expensive health care delivery system than the US has. But apparently Fox news of the world and Kstreeet have wrongly convinced the populace that ours is the best system in the world. Not even close by any measurement, unless you have money and can travel to places like Mayo Clinic, where the “socialized” medicine approach actually works.

    I don’t understand how the facts can be so unsupportiveof something but the PR machine keeps grinding out false information, but that’s our system and apparently many people can be made believers.

  92. rktbrkr says:

    Very interesting NYT article about a solo doctor who can’t sell his practice in suburban MD. The most telling factoid is that he doesn’t provide medical coverage for his 10 employees (all PT, probably so he doesnt have to provide benefits) 30+ year practice.

    He gets $69/visit from Medicare and insurers(didn’t say what he charges uninsured), needs 4 per/hr to break even, has a roster of 4000, cleared 324K in 2006 but only 97K in 2008 (substantial dropoff in visits due to bad economy, lost med coverage even in a wealthy area?)

    http://www.nytimes.com/2011/04/23/health/23doctor.html?pagewanted=1&_r=1

  93. rktbrkr says:

    HarleyHoward

    A construction friend of mine fell from a ladder and had a similar injury, the MD Xrayed, but no MRI to please the insurer. Simple cast didn’t fix a linear crack that didn’t show on the xray led to 3 or 4 subsequent surgeries, 4+ years of lost wages, he ended up semi crippled with a fused ankle, he is suing. The initial MDs decision making was influenced by insurer incentives to keep costs down. My friend was an avid tennis player, now he parks in the blue spots. His insurer alternates between telling him he can’t work to he must work depending on his most recent opinion, of which there have been dozens. Hundreds of thous and a cripple resulting from insurer interference in doctor patient relationship

  94. dss says:

    Sorry about the extra stuff on my comment. Comment submitted before I finished editing.

  95. philipat says:

    @rktbrkr:

    “A construction friend of mine fell from a ladder and had a similar injury, the MD Xrayed, but no MRI to please the insurer”

    A great illustration of some of the problems the US makes for itself. First, a few questions:

    1. Who’s fault was it that your friend fell off the ladder? The prevailing attitude in the US seems to be that someone else is always responsible. Whatever happened to personal responsibility?

    2. You say, “To please the insurer”. I don’t believe that and I suspect that this is purely speculative on the part of you and/or your friend. In fact, in most jurisdictions, in such circumstances, an X-Ray would be SOP at first presentation.

    Outcome: The MD gets sued, his Malpractise insurance increases again (Assuming malpractise can be proven, although the case will probably get settled out of court) and he will now prctises ultra-defensive medicine (You mention an MRI? Why not a 256 slice CT scan as well? That another $5K please) which pushes costs up further for EVERYONE.

    BR does not believe that tort reform is an issue and I strongly disagree. He is probably getting his information from a legal sourse. I have many MD friends practising in the US who pay Malpractise insurance in the hundreds of thousands of dollars PA. This IS costed directly into general practise overeads and immediately pushes up costs, and therefore charges, directly. But it is the INDIRECT costs associated with the Malpractise environment which have the greatest impact, as illustrated by the above case. The example refers to procedures, but it equally relates to tests and drugs, all of which together have an enormous impact on costs

    And so as to keep this discussion on track, I am NOT saying that GENUINE cases of medical practsie should go unpunished and/or uncompensated. What I AM saying, is that the vast majority of medical malpractise cases are frivolous in one way or another.

  96. victor says:

    I still don’t see how we can tame this beast unless we cut costs and every attempt to do so is met with vigorous resistance from entrenched interests. So, add this issue to the other “biggies” of unsolved, work in progress, stalemated, paralyzed problems we have here: taxation, immigration, education, energy, poverty. This list used to contain “housing” but we did solve THATone didn’t we? I do have a question for those who think the US has an inferior health care system compared to other devolped economies ( have lived in several countries incl. Western European ones and the record is mixed):

    According to various data the medical profession/hospital kill-via the wrong protocol, procedures, or bad drugs, or a combination-some ungodly number of patients each year in this country, some say 200,000. I wonder what the stats are for say Canada, France, etc? Any comments?

  97. V says:

    @philipat

    You are right regarding tort reform. Part of the problem is medicine (and science in general) presents itself as a ‘perfect science’ able to diagnose future complications with total accuracy. The reality is there is a big difference between malpractice and a patient having an unforeseen complication. Care always has to be customized to the individual patient as obviously some are more at risk for conditions than others.
    Politically you get into the ‘rationing healthcare’ argument which triggers emotive responses, like the debate about ‘death panels’ and rationing. Ultimately healthcare has to be rationed by some-sort-of market mechanism. It is not possible to give everybody needless tests ‘just in case’ without blowing out the budget. As the population ages this becomes ever more apparent.

    In the case above, having higher medical costs doesn’t help anyone, as it makes the costs of getting a second opinion even more expensive. I am intrigued as to why the insurer didn’t require a second opinion? I would have thought insurers would encourage this, its quite possible one doctor picks up something on an xray that another had missed, but again this goes back to my first point.

  98. DeDude says:

    Unfortunately few patients understand that medicine is like baseball, you have major league (hospitals, doctors), minor league (hospitals, doctors) and (lets not even talk about it). However, no patient have a clear view of what league they stepped into (major or minor), and they all expect a home run every time.

  99. victor says:

    BR: if someone of great stature asked YOU to summarize in one sentence why are our costs so out of whack versus the world’s, what would you say?

    ~~~

    BR: I would say “It is the result of people trying to summarize extremely complex things into inane bumper sticker political slogans”

  100. victor says:

    Great idea, I saw a bumper sticker reading: “Jesus is coming and boy is HE pissed!”. I think it would pretty much sum up where we stand on health care.