In honor of my recently hospitalized (and released) colleague, discuss: American health care costs are wildly excessive relative to the rest of the world

 

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Source: priceonomics

Category: Digital Media, Taxes and Policy

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.

92 Responses to “Discuss: The Price of US Health Care is Too Damned High”

  1. key-bit says:

    It is not easy to comparison shop online for medical services. We have started going to minute clinics at Walgreens for minor needs.

    The next heart surgery I have I will shop around (possibly out of the country) but it seems difficult to comparison shop with insurance and the same quality of care.

    • rd says:

      There is a major business opportunity in defibrillators that are connected to the web. When it is used to shock an unconscious, flat-lined patient it will automatically do an on-line search for the cheapest local heart clinic with up to date pricing so that the patient can make an informed decision on his way to the hospital, although it is possible that the epinephrine injected straight into the heart will make for poor decision-making skills at the time.

      Kind of like showrooming stuff at Best Buy while checking prices on Amazon on your smartphone to see if you want to buy it on the store or get it delivered from an on-line source.

    • eliz says:

      @key-bit: Agree wholeheartedly. When people go in for medical care, there is absolutely nothing transparent about the costs. Nothing. Heck, more is required of auto shops – at least in my state (where a customer gets a written estimate for anything over $100, and has to be contacted for approval if the estimate will be exceeded by more than 10%).

      The current medical system is like going to grocery stores where no prices are posted and customers only find out the prices once they get to the checkout? Would anyone stand for that?

      • Beerhat761 says:

        >The current medical system is like going to grocery stores where no prices are posted and >customers only find out the prices once they get to the checkout? Would anyone stand for that?

        No eliz, not when they got to the checkout. The find the price after they’ve eaten the food!

      • victor says:

        worse yet only after they’ve eaten the groceries

  2. Asymptosis says:

    In what other industry are *prices* witheld as “trade secrets”?

    And this, an industry that comprises 16% of U.S. GDP.

  3. rd says:

    It has been drummed into our heads in basic micro-economic theory that there is an equilibrium point where supply equals demand at an optimum price. These data show clearly that this is not the case for health care:

    http://demockracy.com/tag/mri-units-per-1-million-persons/

    MRIs and CTs cost significantly more in the US than just about any other country but there are far more MRI and CT usints per capita in the US than other countries. Micro-economic theory would tell us that the increased supply would cause price competition so that the cost of these tests would drop or unused equipment would leave the market place. Instead, it appears that pricing is inelastic (like you get with monoplies and oligopolies) at a very high price level that is signficantly greater than other countries can operate effectively at.

    The pricing model in the US is completely broken, especially where “private sector” suppliers come into play..

  4. kubrick says:

    I am a diagnostic radiologist with a private practice. I would love to see where these numbers come from! They sound like extremely wealthy hospital rates. I get between $150-220 or so from most insurance carriers for a CT scan in the tri-state area. It is hard to fathom that these rates are possible. I remember thinking the same when I read about MRI rates.

    Maybe they are cash paying rates? They are definitely not Medicare, Medicaid, or any of the private insurers I have ever dealt with. Maybe out-of-network, but how many people are getting CT scans out–of-network? It is not common. It kills the entire thesis. And I don’t believe that a CT scan costs near $1,000 in Chile either! These have not been properly fact-checked.

    • river says:

      This article might explain a little better about where the survey of numbers come from: http://economix.blogs.nytimes.com/2013/03/29/u-s-health-care-prices-are-the-elephant-in-the-room/?smid=fb-share

    • eliz says:

      Abdominal CT Scan prices where I had one a couple of months ago: $1784.00 charge (what a cash payer would pay). $540.00 – contracted charge.

    • Sarge says:

      @Kubrick,
      I went to the emergency room Last Memorial Weekend (2012) for a kidney stone. They did a Cat scan. The provider charged BlueCross $1,781.00 BCBS paid $1,246.70. This was on top of about 10-12 Lab charges of $75-110 each plus the ER charge of $1000.

      Total paid for that visit which resulted in me going home with some really good meds until I could see my Urologist was $3081. You don’t even want to know how much the L5-S1 fusion on my lower back in Sept cost.

      The thesis is valid. Something is definitely broken in our healthcare system.

  5. MikeNY says:

    Yes, our healthcare expenditures are double the OECD average of 8%. We are spending $1 TRILLION a year more than we would be if healthcare were nationalized. Who benefits? Our medical-industrial complex: insurance companies, big pharma, and doctors.

    Healthcare must be nationalized in this country. TINA: there is no alternative.

  6. kubrick says:

    Sorry I mixed up the numbers for Chile. The international numbers look promising.

    For what it is worth, I’ve offered rates similar to those to insurance carriers who refuse to allow me in-network. After all, they have to keep the hospitals happy, despite the rates.

  7. RandyS. says:

    In Clayton Christensen’s book The Innovator’s Prescription, he states that the guiding question for health care reform is NOT “How do we afford health care?”, but “How do we make health care more affordable?” Two very different questions that lead to potentially different outcomes. The first biases toward financing, the second, structural reform after an examination of incentives, regulations and organizational models.

    If you folks haven’t read it, I highly recommend it.

  8. MikeNY says:

    Oops, I guess it’s “OEDC”

    And I forgot to add: we spend double the other countries, with NO BETTER RESULTS as measured by life expectancy or mobidity.

  9. Theravadin says:

    Yup. When my wife had a seizure in Chicago, and the emergency room doctor charged $1000 for 15 minutes of consultation, we knew we weren’t in Canada any more…

  10. financeboomer says:

    Do you have any information on what legal costs add to U.S. medical spending?

    ~~~

    BR: tiny relative to overall costs — a few billion dollars out of trillions

    • lrh says:

      Do you have any links that breakdown the line items that when added together produce the “cost” of medical spending. How do various countries account for the health care professional’s education costs for example? Or the cost of each facility (land leases or acquisition, construction costs etc.)? Are there subsidies for equipment purchase and maintenance and are each a line item in the cost analysis? Who audits the statements by the way? Have you got an “apples to apples” comparison?

    • postpartisandepression says:

      both Texas and California have limits on the amount that someone can get if they sue for malpractice – in Texas at least it is limited to $250,000- which essentially makes it impossible to sue because no lawyer can make anything with a pay out like that. This has been in place for at least 8 years and there has been no lowering of healthcare costs (or much in malpractice premiums)

  11. mitchn says:

    It’s the way the “market” works in a crony capitalist system rife with regulatory capture.

  12. retrogrouch says:

    Meanwhile Costa Rica has better infant mortality and longevity than the U.S. – now who’s the banana republic? http://country-facts.findthedata.org/compare/1-16/United-States-vs-Costa-Rica

    • lrh says:

      The link says Costa Rica had a 9 versus the US at 6. Is that “better?”

      Also these numbers need further clarification. How does the country define “live birth?” How does it collect and verify it’s data? Are projections used? Surveys?

  13. Tim says:

    I’m in healthcare interim management and consulting. The whole system is a mess. The “administrators” are largely idiots:
    http://www.medscape.com/viewarticle/77041
    http://www.zerohedge,com/news/guest-post-how-cut-americas-healthcare-spending-50
    http://www.healthleadersmedia.com/QUA-286566/Why-Healthcare-Costs-Trillions
    http:www.forbes.com/sites/leahbinder/2013/02/21/the-five-biggest-problems-in health-care
    …and many more……
    Tim McInerney
    tim@healthcare-consulting.com

  14. Mike in Nola says:

    There’s also the lack of coverage. We went to a Macy’s in West Houston because my wife wanted to shop and the Galleria is horrible though much closer. Anyway, she mentioned that the lady who waited on her was very nice. The lady is 72 and has macular degeneration. The periodic shots to treat it cost $1000+ and she figures she will have to work til she dies so she can keep Macy’s insurance coverage since Medicare doesn’t cover it. Really outrageous, but that’s modern, non-socialist America.

    • fineoldcorker says:

      As a Canadian, I’m appalled. Americans need to hang together as a country. Extend some health care help to your fellow citizens when they need it.

  15. Frilton Miedman says:

    Having engaged in countless ugly debates to debunk propaganda back in 2009-2010 with Fox drones, the only thing scarier than the cost of healthcare is how incredibly influential big money can be, and how stupid some Americans are when it comes to believing what they’re told (Fox) versus reality.

    Memorable talking points, courtesy Fox network -

    “Get big government away from my medicare!”

    “Death panels” – Yeah, the private, for-profit sector has no death panels that cuts off the chronically ill.

    “Government takeover”, Ye gads man, 50% of healthcare revenues are government subsidy, yet to induce competitive pricing with a low budget government option is a “takeover”?

  16. Mike in Nola says:

    @ Kubrick

    Maybe the rates are for Texas. Over 25% of people in Texas have no coverage. No socialism allowed here.

    • gopokes65 says:

      I’m in Texas (north of DFW), we couldn’t get coverage for my wife. She is 8 1/2 months pregnant. They told me she is uninsurable. Period. Forget not have maternity coverage. No coverage period. Before Obamacare, we couldn’t have gotten coverage for my daughter who is one. My employer doesn’t offer group coverage. I had to try to get insurance thru the high risk pool. If I didn’t have coverage already, I couldn’t have gotten any. Totally broken, 20% of my salary this year will go to healthcare. I am a 33 year old healthy male and have a decent paying job as a CFP.

    • modernone says:

      If there us no profit, death is better.

  17. slowkarma says:

    What is needed in this discussion is reliable data, and identifying that has become almost impossible. The situation is so politicized — witness the comments here — that statistics are routinely bent to ideological purposes. I would propose (but couldn’t prove it) that American medical care is basically in line (in terms of quality) with that of other first-world nations. Statistics that suggest otherwise are usually demonstrably biased. Britain, for example, has cradle to grave national health care, and has an average life expectancy of more than a year and a half longer than the US. But does Britain have 60 million immigrants, including ~13 million illegals, one-fifth of the population, mostly poor, many of whom had no health care at all in their native countries, many of whom are afraid to seek treatment here for fear of being deported? Might not that some impact on the statistics? Frankly, I don’t know — but I believe it might have. In fact, I think there are so many different factors in the cost of American health care, that it’s almost impossible to determine why costs are so much higher here — or even if they are. What’s the impact of the “tort bar?” What’s the impact of patient demand? In most places in the US, it’s illegal for hospitals to turn away people in need of critical care, whether or not they can pay — does the impact of this “free care” drive up the cost of the care paid for by individuals or insurance companies? Well, somebody has to pay… Are the stats that say a scan costs an average of XX, averaged with those that are done for free? Where is the data coming from, and for whose benefit are the costs pegged at a particular level?

  18. CB says:

    The hip racket:

    http://well.blogs.nytimes.com/2013/02/11/price-for-a-new-hip-many-hospitals-are-stumped/?hp

    http://www.nytimes.com/2013/02/11/opinion/what-depuy-orthopaedics-knew-about-its-all-metal-hips.html?ref=opinion

    Obviously the US medical services/insurance cartel obstructs any attempt at comparison shopping for services – (and forget comparing outcomes – privacy protection!) Except when it’s YOUR demographic, credit history, or purchasing/browsing data – then of course it’s up for grabs and freely sold on the global data market. They say it’s done for your benefit to match your interests with products and services. Oh yeah? – so I’m interested in a hip replacement – how much and who has the highest percentage of satisfied customers? Few answers available due to medical privacy huh? But maybe between $11k to $127k – WHAT??? and possibly using a known high failure rate (but long unreported) device?
    Why do we put up with this? Why?

  19. TLH says:

    Hospitals are hiring more and more doctors. What do you think that does to health care dollars? Got to keep those scanners busy. Hospitals are opening free standing ER’s. They are trying to replace private practice at much higher cost. Nurse practicians order scans for everything. The scans make up for a lack of knowledge.

  20. willid3 says:

    We keep thinking that healthcare is like any other market . Its not. Its made up of monopolies. And buyers have no way of making an informed choice. And they will choose to do nothing if it costs a lot. Until they are forced to

  21. wrongtrade says:

    I am also a physician who does imaging services. The insurance allowables differ among physician offices, imaging centers and hospitals but I can tell you that those allowables are way too high. Maybe pie-in-the-sky hospital out-of-network rates. This post goes up quickly do to confirmation bias.

    • DeDude says:

      Yes and as a result of hospitals getting much higher reimbursement rates for the exact same thing a physician can doing in his/her office – we are witnessing a migration of physicians offices into hospitals (where the physician can get paid more and there is still plenty of excess cost to also give the hospital its share)

  22. Sun Tzu says:

    I think we are caught between the semi subsidized nature of the industry much like education, defense, housing and the post office. Individual components are privatized operating in their respective markets to spur innovation, research and productivity. Collectively they fall under the publicly managed umbrella.

    This dual state of existence is why I think prices are out of control. We have to choose either total cutthroat laissez faire or a one payer policy to control pricing. This in between is not working.

  23. billybob says:

    If memory serves, fraud and waste constitute ~$500B (1/3) of the annual spend. Add to that the insanely inefficient and costly paper-based systems and you’ve got an industry just begging to be gutted and streamlined.

    Greatest country on earth? Yeah–at fleecing its populous.

  24. kubrick says:

    @mike

    The owners of centers in Texas are not getting $600 per CT scan (about half). Again, I’m talking about private outpatient imaging. The hospitals charge several multiples of what we charge in the outpatient world and in about a year or two, they will control the entire healthcare cost structure. Let’s see what happens.

  25. gopokes65 says:

    I had a deep corneal infection 2 weeks ago. Rx for 3ml of Vigamox $110. Rx for 5 ml of Lotemax $85. $220 (each) for 3 visits to the ophthalmologist in one week and ultrasound for my wife $850. One week’s worth of medical expenses. And then there was the issue of trying to secure insurance for my wife and daughter. Republicans had their chance they dropped the ball, they deserve whatever they get.

    This is the actual email I copied to all my elected officials as I battled big insurance. Mr. Browning is the head of the high risk insurance pool for Texas…

    From: Kyle Eaton [mailto:kyle@renchgroup.com]
    Sent: Tuesday, April 02, 2013 4:54 PM
    To: browning@txhealthpool.org
    Subject: FW: Please help

    Mr. Browning,

    I am writing you as a last resort and out of utter frustration. I feel like that I have taken every step to do thing right and be responsible, yet I am being punished, with no fault being my own. Please let me explain my situation. I am employed by a small firm (4 employees). Because of the size of our firm and the cost of health insurance, I have had to purchase an individual policy for myself for the past 8 years. My wife taught for the state of Texas for 5 years before our first child. At that time, we made the decision for my wife to leave the workplace. At the time of her departure, we elected COBRA coverage for her and my daughter.

    Approximately 8 ½ months ago, my wife and I discovered that we were pregnant with our second child. Shortly there, I began the process of exploring insurance options. I knew that it was impossible to get maternity coverage in the state of Texas if you are on an individual plan, but I did not realize that pregnancy meant you are uninsurable. BCBS refused to convert our COBRA to an individual policy, even one that did not include maternity benefits. The Insurance Pool was my last hope, but I found out yesterday that my wife’s application was rejected because of my insurance situation at work. After 7 plus years without any type of benefits whatsoever, two months ago my employer finally decided to explore health insurance coverage for the firm. Group plans were so expensive that our company could not afford to insure the employees. As an alternative, my employer setup a Health Reimbursement Agreement to help me with any medical costs that I might have. Now I am being told that because I am not taxed on that reimbursement and because I have the ability to use those funds for insurance coverage that I am part of a group plan??? I don’t understand how that can be? I never had any input into the decision. In addition, the amount doesn’t even come close to covering my monthly medical costs.

    I was told that if the plan was modified so that the HRA was included in taxable income there would be no problem, my wife could be insured. However, my employer will not sign the affidavit. He said that can’t sign it and that even if he could he wouldn’t because it would undo everything he did 2 months ago.

    My understanding was that the insurance pool was for people in my situation, who can’t obtain coverage. Exacerbating the problem is that my wife’s COBRA expired yesterday and our due date is about 2 weeks away. We have dutifully been paying into COBRA for the past 18 months; however, I am now told that it doesn’t matter. When our daughter is born, the birthing center will submit a global billing to our old COBRA insurer (BCBS). BCBS has already informed me that they will reject our claim, although they had absolutely no issue with cashing my premium checks for the last 8 ½ months while I was chipping away at my deductible. We made every attempt to be responsible, even to the decision to try to birth at a birthing center versus a hospital because of cost. Now as the sole provider for my family, I have unlimited liability. If my wife were in an accident totally unrelated to the pregnancy it has the potential to create financial hardship for my family. In addition to that, there have been some minor complications regarding my wife’s pregnancy. Like I said, we have been very prudent with our health care use; however, we had to see a prenatal specialist last week. The appointment was about 20 minutes in duration. The BCBS negotiated cost for the appointment will be around $400.00. I asked what I would have to pay if I didn’t have insurance and they told me $850.

    Bottom line, I simply do not understand why my wife is being denied coverage when I personally had no opportunity to secure coverage for her.

    I would greatly appreciated any insight you might be able to provide or potential solutions to my situation.

    Sincerely,

    Kyle Eaton

  26. kubrick says:

    @Asymptosis

    “In what other industry are *prices* witheld as “trade secrets”?

    And this, an industry that comprises 16% of U.S. GDP.”

    The sad reality is I would be scared to publish rates openly as it would definitely anger the insurance companies if I undercut the hospitals or “preferred” players by a significant margin. They would likely move aggressively to push me out-of-network.

    It drives me crazy that we can’t compete on costs simply because the structure is set up to discourage it.

  27. Brian C says:

    @ Kubrick

    Those rates are probably before insurance adjustments. For example I just had a GI emptying study done(4 separate CT scans over 4 hours) and my bill was as follows:
    Total Charges $2085
    Total Insurance Payments $707.56
    Total Adjustments $1,298.82
    Patient balance $78.62

  28. theexpertisin says:

    Don’t fret. The Supreme Court-sanctioned Health Care Tax legislation is coming to the rescue. Problem solved….

  29. dina says:

    You can’t compare prices in two countries directly. The price of the instrument is the same in all countries but other expenses may be different.
    In India an MRI scan costs $100 but the radiologist is paid $500-$1000/month. Obviously a radiologist in the US is paid more. Actually the price of a MRI scan is cheaper in the US.

  30. Syd says:

    The way health insurance premiums jump 5-10% or more every year, faster than the overall rate of inflation, has led me to consider dropping health insurance coverage and paying as I go, or getting a policy that only covers catastrophic injury/illness. I ended up switching to a high deductible plan.

    A problem with pay-as-you-go is providers tend to charge more per procedure/service if you don’t have insurance. Not sure how trustworthy it is, but this website offers pricing info: http://www.healthcarebluebook.com/

  31. grcacc says:

    At some point, you just have to take a stand.

    US Healthcare is horrible. I blame government interference and a non-market based payment scheme. If you tried to think of the WORST way to provision medicine, you still couldn’t invent something as bad as what has evolved in the US. I’ve experienced socialized medicine in the UK and Canada and both are FAR superior to the US, for normal illnesses, It sucks for knee replacements or preventive care like stents as you go on the magic list and can wait years….

    I went to a hospital emergency room with a broken humerus (shoulder) and sat and waited 45 minutes in an empty waiting room. I visited a chiropractor before going to the hospital as I hoped I’d only dislocated my shoulder. So I’m waiting for a doctor and have an x-ray I’ve brought with me and I tell the admissions person I need an orthopedic surgeon as I’ve broken my shoulder. Blah, Blah, Blah, Insurance card, $250 credit card charge, and wait another half hour, in severe pain.

    A nurse comes in and asks what the problem is, I tell her I’ve broken my humerus and need an orthopedic surgeon. She takes xray, disappears 5 minuets and returns with, a pain pill, a sling and 2 photocopied pages of local orthopedic surgeons. And essentially tells me to get lost and call an orthopedic surgeon the next day.

    I explained the ONLY reason I came to hospital was I knew I’d broken my shoulder and needed an orthopedic surgeon, and was leaving in extreme pain and disappointment.

    The next month I receive bills from the doctors (who I never saw) and the hospital for overs $3k. After insurance was applied, it dropped to around $1k, which I had already paid $250. I trashed bills and called my insurance company and explained what had happened. Together we called the hospital and the doctors to try and get some explanation and they refused to talk to the insurance company about the lack of any treatment.

    Doctors Hospital in Dallas Tx.

    A debt collector called me and I explained what happened and that I was looking forward to discussing the fraudulent bill in front of a judge. They never called back. I will die before I pay these cretins for their fraud. I’ve now been trained, NEVER go to the emergency room. Urgent care clinics have been great, I just never thought to go there with a broken bone.

    Me, I blame the doctors. They drive the system and have created it to maximize their income and wealth. Once everyone knows who to blame, maybe something will happen.

    Obama-care is not a solution. The solution needs to put the patient in control. As long as insurance companies or government bureaucrats are in control, they will continue down the same path. Both have motivation to keep it complicated. It’s their job. These pencil pushers are 2 sides of the same problem, that is taking the patient out of the decision making.

    The only hope I’ve heard of in the past 10 years was Paul Ryan’s plan, which make so much sense, it will never be enacted. Politicians want to be in the middle of this as it will drive political contributions and political divisions.

    Just makes you want to give up / throw up……

    ~~~

    BR: non-market based payment scheme? Your beef is with your insurance company. HEalth care does not lend itself to market based payment schemes . . .

  32. f95kai says:

    Agree 100%. Doctors and hospitals are WAYYYYY overpaid in the US. I was able to make the comparison when I partially broke my neck last year while on vacation in the Texas and saw the travel health insurance bill afterwards. Back home in Germany, the doctors were just shaking their heads in disbelief at all the unnecessary stuff their American colleagues has prescribed, and the insane amounts they charged.

  33. Cato says:

    From a personal perspective, I was in a pretty serious car crash when I was living in South Carolina about five years ago and injured my lower back. I was well-insured and not really aware of the actual costs (just paid a pretty reasonable excess until coverage kicked in). However, what was very interesting was the approach taken by the various doctors and specialists I saw. They were very very wary of any direct (surgical) intervention and we tried various injections and other therapies while my condition slowly deteriorated. When I moved back to the UK, I saw a specialist (admittedly this was still with private insurance so not an NHS comparison) the day after I got back who said that such techniques would never have prevailed in so serious a case, and so I had a major operation two days later. Back is not perfect but I function and, given the state I was in (including rapidly becoming addicted to legal-but-really-expensive opiod painkillers), that’s just fine. I have often speculated on why the doctors in the US, who were clearly eminent in their field and colleagues of the doctor who performed the operation in the UK, were so circumspect about operating. I nearly always come to the conclusion that it is fear of being sued, rather than a desire to add to the cost as implied by several previous posts. I might be wrong but that was my impression! It also seems to me that the litigous culture, right or wrong, is another major factor in adding cost in the US.

  34. ami_in_deutschland says:

    Another perspective from Germany (I’m an expat):

    1) Low education costs. Physicians and other medical professionals can complete their training with no or little debt.

    2) Doctors earn well, but not to the degree in the US. On the other hand…

    3) Their hours tend to be more regular. This is due in part to the clear separation of responsibilities between private practices and the hospitals (no on-call time or hospital rounds for GPs, for example), but also to…

    4) High rationalization and simplification of paperwork. Although there are dozens of insurance cooperatives to choose from in the public health system, they all issue the same smartcards containing patient data to their members, and all forms — whether referrals or prescriptions — have standardized formats. The number of people and office space needed for basic administrative tasks is visibly much lower here.

    5) Due to practically universal coverage of the populace, medical problems can be caught early before they require expensive emergency treatment.

    • postpartisandepression says:

      absolutely spot on- healthcare is not something you shop around for. Your wife has cancer and you are going to go from doctor to doctor to see who is going to give you the best price? Healthcare is not widgets and is not subject to market forces like widgets are.

  35. spooz says:

    The rest of the world has figured out that universal health care works best, but the USA has to keep representing for free markets uber alles. Wonderful system, including the duopoly lock on any change.

    http://www.businessinsider.com/best-healthcare-systems-in-the-world-2012-6?op=1

  36. Moss says:

    The system is set-up to extract as much $$ as possible from the captive customers. No transparency, no comparisons possible, defensive medicine, protected patents, price gouging. No wonder Health Care stocks are the best performing over most periods.

  37. Cato says:

    Adam Gopnik wrote an amusing piece on the BBC website about the foibles of four countries: http://www.bbc.co.uk/news/magazine-22028316

    Tongue firmly in cheek but one of his conclusions was: “Americans can’t solve their child-killing problem in part because Americans refuse to believe that other rich countries have gun laws that work. Americans refuse to believe that other rich countries have laws at all. The accumulated wisdom of the world on the question of health insurance is completely unknown to most Americans, and enters the debate only to be scoffed at. Not only does everything happen for the best in America – everything happens in America alone”

    It has always interested me how the country (redneck) part of my family in VA are so opposed to “socialized” healthcare despite several suffering from chronic conditions they cannot afford to alleviate. So it appears we are also dealing with a question of will to change and/or cultural mindset here.

  38. jlj says:

    Your graph on CT scan is incorrect. Recently had to have one in hospital, they charged me/insurance company $6000.00. So prices on graph may be prices that insurance companies are willing to pay, not what a hospital will charge. Large difference.

  39. A says:

    Just part of a larger picture, where Power & Profit take Precedence over People.

  40. Chad says:

    The biggest issue is that it’s impossible to have a free market in healthcare and trying to created our current mess.

    The second biggest issue is the reliance on beliefs over actual real information and facts. You can show the cost/benefit analysis of the Canadian or British healthcare system vs the US healthcare system to “damn gubermint” person for years and it won’t change there mind. I guess just sticking our heads in the ground is the culmination of a few decades of rapid change and the irrational fear of this change. A large group of people in this country convert that fear into unsubstantiated beliefs, which they appear to believe will some how magically work.

    Although, I could be wrong in the order I placed those two issues.

  41. Mike in Nola says:

    @jlj:

    One big problem is that hospital prices are so squishy because of our Byzantine system (Maybe the term “Byzantine” should be replaced with a word referring to American healthcare financing).

    Unmodified bills are pretty scary, but insurers have negotiated rates that knock them down a lot. Medicare won’t pay retail, either. The full retail price is only intended for the uninsured. And even they can get it knocked down some if they question it. The bill you saw was probably the retail bill and your insurer paid significantly less.

    An example from 18 months ago. Had a strep infection in my leg from a scratch while gardening. Got bad enough to require hospitalization and IV antibiotics for 8 days. My fault. The hospital bill was $25k, the insurer paid $7.5k and our copay was $1,300.

    • postpartisandepression says:

      your fault? because contrary to popular belief our healthcare costs are not too high because we run to the doctor with every little thing. Instead we tend to neglect things until they get really bad and require hospitalization precisely because most of us don’t have a relationship with a doctor- unlike most european countries where you always have your local GP.

  42. A says:

    Travel insurance agents in countries OUS, advise their clients if they are not planning visits to the US, their premiums can be between 30-40% lower. Quite often, the OUS insurance companies will have patients stabilized and then flown home for any required surgery or hospitalization. Not only because of inflated costs, but because of the widely varying quality of care, depending on the US region and city. Foreigners who winter in Florida, for example, are very selective about location and the available quality of care.

    The cost to fly someone home, is equivalent to about 2-3 days stay in a US hospital.

    In one example, a foreign patient required surgery to deal with a pancreas issue. The initial quote was for $36,000. When the surgeon heard that the patient was from outside the country and might be flown home, the ‘price’ suddenly became $8,700 (still at least double what it would cost at home).

    It will be interesting to see if the quest for profit causes any significant declines in US tourism.

  43. Mike in Nola says:

    @Cato

    Which “Cato” are you calling yourself after? My feeling for years is that the Cato Institute was secretly named after Cato the Elder who advised keeping your slaves busy while they were fit for work and then freeing them when they became old so you wouldn’t have to pay for their upkeep.

    • Cato says:

      To be honest when I signed up I was reading Imperium or Lustrum by Robert Harris where a fictionalised Cato the Younger appears as a staunch defender of the Republic, probably not as a particularly sympathetic character though since the focus is on the pragmatism (occasionally to his shame) of the main protagonist Cicero. I just like the name. There’s probably also a nod in there to the Pink Panther movies I was glued to as a kid…

  44. beltane says:

    There have been a number of comments along the lines of “I work in this field and I don’t see anywhere near that amount so these numbers must be wrong”. This ignores the fact that none of the individuals in the system have any idea where any of the money is going. The prices, costs, and profits are so oblique that any actor is unable to make rational, market based decisions. On a personal note I recently had an echocardiogram the total charges were about 1.7k, out of pocket costs were about 300 to the facility and 300 to the doctor so they dont look out of line to me at all.

    • kubrick says:

      @beltane

      I am definitely not ignoring the opaqueness of the market. In fact I hate it and am ashamed that I am in this field.

      But what are doctors supposed to do at this stage in their lives? If I want to keep my medical license and see insured patients, I am told to keep quiet about the rates. I don’t think this will change. I have been in a hospital environment as an administrator. It is like the mafia.

      I don’t care if we get capitated or fee-for-service and would happily take $200 a CT or $400 an MRI without complaints but I would like for the hospitals to stop playing dirty, putting us out of business, hiring us as employees so that they can charge 5x as much as I do for the same service to pay executive bonuses!!!

  45. WFTA says:

    It is very, very simple: the interests that own our government want it so.

  46. ironman says:

    This question is probably better directed to priceonomics, but is it really appropriate to compare other countries’ average costs to the 95th percentile cost in the United States? Why not do a proper apples-to-apples comparison and also show the other countries’ 95th percentile costs?

    It’s like they’re trying to gin up a Michael Mann-style hockey stick chart!…

    • river says:

      You realize, don’t you, that America doesn’t charge by any rhyme or reason and that all of the other countries charge a set amount for a set procedure because their healthcare systems are nationalized (in other words, other country’s 95th percentile is the same as the average and is the same as the 5th percentile)? You would think in a free market that a certain procedure would cost largely the same . . . a certain amount of time in the hospital, the cost of the operating room, the cost for the workers, a moderate amount of profit. Maybe there would be a little difference in cost since a doctor in New York or LA is making more money and has a higher standard of living than a doctor in North Dakota, but by and large, any cost differences should be somewhat explainable. Evidently not so in the United States.

      According to this study, they attempted to get the cost for a procedure (To examine whether we could obtain pricing data for a common elective surgical procedure, total hip arthroplasty (THA)), and checked (2) hospitals in each of fifty states, and the top 20 ranked orthopedic centers across the country.

      There conclusion: Nine top-ranked hospitals (45%) and 10 non–top-ranked hospitals (10%) were able to provide a complete bundled price (P < .001). We were able to obtain a complete price estimate from an additional 3 top-ranked hospitals (15%) and 54 non–top-ranked hospitals (53%) (P = .002) by contacting the hospital and physician separately. The range of complete prices was wide for both top-ranked ($12 500-$105 000) and non–top-ranked hospitals ($11 100-$125 798).

      http://archinte.jamanetwork.com/article.aspx?articleid=1569848#.USPpIip7900.facebook

  47. ancientone says:

    We pay double the nearest of any other country for health care because we are the nation of economic rape, taken as a given, with no sense of societal responsibility to our fellow countrymen. They call it “free market capitalism,” with any pricing practice other than charging whatever the market will bear being called “socialism.” We are a country of immoral, greedy crooks, and proud of it!

  48. formerlawyer says:

    The issue breaks down this way: the private “health industry” are in competition with government in health care. Government provides perhaps as much as 50% of the health coverage in this country but that is the lowest margin unprofitable sector of health care by design. The private health care industry, and yes I include insurers in this regard, are free to take the cream in low cost – high margin “customers”. Once you become ill, old or infirm e.g. pregnant, insurers drop you like a hot potato. The design is in the laws that govern our “health care” mis/delivery system swayed by large lobby groups. The fellow travellers of the health care industry, well they can point to horrific anecdotal stories or even statistics (provided they ignore VA Hospitals) to say that government funding is inefficient and private delivery is better.

    Oh, and other countries? They are just the “man behind the curtain” ignore them. Why? Well other countries don’t have umh illegal immigrants, umm diverse population, umh lower paid doctors, mooch of our innovations….

    Don’t believe me? Four of the top 10 lobby groups are heath related and Health is the second industry in spending for 1998-2012. Look it up: http://www.opensecrets.org/lobby/top.php?indexType=s

    • hue says:

      very nice line, “Once you become ill, old or infirm e.g. pregnant, insurers drop you like a hot potato.” No coverage for pregnancy in Texas? WTF?

      I realize it was tongue in cheek, but there isn’t a lot of data regarding health care cost for (last in when we want to slam the doors) immigrants, a highly politicized issue. This dated study says the cost is half that of natives.

  49. RC says:

    BR,
    CT Scan brings back the shocks that we received when my wife had to go to ER last year for a stomach virus. A CT scan was done and pain medications administered intravenously and was released in 2 hours.
    We got a bill for $8200. When I asked for itemized bill, I saw that CT Scan was billed at more than $3000. A standard pregnancy test was billed at $193 (the same test which Walgreen’s sells for $5) ..

    American Health care system is the last thing completely untouched by the market forces and has become a version of highway robbery!!

    I get a chuckle when people talk about “disruption” in media business or some such other segment, when 20% of GDP (more than 3 Trillion dollars) Industry needs disruption and no one is able to address it.
    Obamacare is NOT going to help with this price gouging by hospitals and Doctors , at all. We need to improve upon Obamacare. Republicans can help with that, if they werent too busy fighting for the rights of rapists and gun owners.

  50. DeDude says:

    We have unleashed the market forces on health care and gotten the predicted results.

    The incentive for the person selling a product is always to sell you more – and at the highest possible price. The only counterweight to that is a costumer who knows exactly what (s)he need/want, and can compare products and prices between many different providers.

    Unfortunately, in medicine the counterweight is not there. The “costumer” has no idea what is wrong or how to fix it. Nor is (s)he able to shop around and compare “price vs. benefit” of the potential options that (in theory) could be peddled as solutions to the problem.

    If we want to have medicine practiced as a private “for profit” enterprise then we need someone else than the “costumer” to be the counterweight. And yes that will infringe on peoples right to be conned, swindled and over-treated. The alternative is non-profit medicine where the people with the knowledge and power do not benefit from doing in excess, than from doing no more than what is needed.

  51. Tim says:

    An Entrenched System
    Pharmaceutical companies, medical device manufacturers, hospitals, and insurance companies are all profiting on our declining health. And all those companies spend their money lavishly – millions of dollars go to Washington lobbyists – to ensure that nothing ever changes.

    Overmedication
    We spend roughly $300 billion annually on pharmaceutical drugs – nearly as much as the rest of the world combined.

    Overtreatment
    One of the hardest things to understand as a patient is that “more” doesn’t necessarily mean “better.” But it’s imperative that we do. Recent studies have shown that “more” can often mean “worse” when it comes to our health.

    Paying More Getting Less
    We pay more, yet our health outcomes are worse. We give well-intentioned doctors, nurses, and hospitals the wrong tools and the wrong incentives, and it results in higher costs and poorer health.

    Preventing Disease
    75% of healthcare costs go to treating diseases that are largely preventable. That’s a lot of unnecessary money, and worse, a lot of unnecessary disease.

    Reimbursement
    The healthcare system often uses a “a fee-for-service” model of payment – government or private insurers pay a hospital or a physician every time a procedure is performed.

    Treating the Whole Person
    Your body isn’t a car, but that’s how it’s handled when you take it into the doctor’s office. Instead of being treated as a person, your broken parts get fixed separately, one by one.

  52. Arequipa01 says:

    Yesterday morning as I stood in line to request an appointment with a pediatrician for my daughter at a clinic run by my uncle-in-law down here in AQP, Peru, I saw a poster advertising mammograms for S/. 35.00- that’s approximately $14 USD- with very new equipment from Germany…please let me know if one can find a mammogram cheaper than $100 in the US.

    HC is priced like it is in the US because it bloats the GDP number, and that bloat is everything. It doesn’t matter how big the US national debt becomes, as long as that GDP grows, they’re happy- cuz it’s [a] growth.

  53. farmera1 says:

    No one could design a worse health care system than what the US has. Period. Free market my ass. Just try to find out what an operation will cost before hand. It won’t happen. As a percent of GDP we spend at least 60% more than any other country with worse out comes in infant mortality and life span than all of the other industrialized western countries.

    Personal observations:
    1) The vast majority of doctors in the US are paid on piece work. The more procedures (operations, tests or what ever) the more they make. The exceptions are places like Mayo Clinic and Cleveland Clinic which happen to near the top for providing quality health care at reasonable costs. The Doctors at these two places are paid on salary. Doctors are human and they react to incentives.

    2) The government can not for the most part negotiate prices of prescriptions. The VA can but as part of the Medicare part D law passed by Bush it is illegal for the government to negotiate costs for prescriptions.

    3) The quality control in the 5 hospitals I spent time in over last 5 years (for self, wife, mother) are atrocious. Common practices like washing hands to prevent infections are not followed. The control of access to operating rooms was non existent. Control of medications relied on hand written notes on the out side of drinking cups, of which about fifty cups were set on a cart for delivery to patients rooms.
    I spent many years in the pharma industry, and if we had this poor quality control, we would have been out of business long ago.

    Insanely high costs, insanely poor results and out right terrible quality control. Like I said if you wanted to it would be impossible to design a worse “system”.

  54. catman says:

    Healthcare in America is run the same way as body shops after a crash. The docs cant give you a loaner, and they cant give you an estimate either. The uninsured can negotiate with the doc, but the hospital -whew. Alas we are too free for single payer.

  55. victor says:

    Bright spots; Kaiser Permanente, Mayo, Cleveland…..

  56. 873450 says:

    American senior citizens live longer. Are they entitled? Did they earn it?

    http://www.nap.edu/catalog.php?record_id=13497
    In light of the new and growing evidence about the U.S. health disadvantage, the National Institutes of Health asked the National Research Council (NRC) and the Institute of Medicine (IOM) to convene a panel of experts to study the issue. The Panel on Understanding Cross-National Health Differences Among High-Income Countries examined whether the U.S. health disadvantage exists across the life span, considered potential explanations, and assessed the larger implications of the findings.

    http://www.washingtonpost.com/opinions/harold-meyerson-us-health-care-leaves-much-to-be-desired/2013/01/15/6b154846-5f5d-11e2-b05a-605528f6b712_story.html
    “… As documented in voluminous detail in a 404-page report released last week by the National Research Council and the Institute of Medicine, Americans lead shorter lives than Western Europeans, Australians, Japanese and Canadians. Of the 17 countries measured, the United States placed dead last in life expectancy, even though we lead the planet in the amount we spend on health care (17.6 percent of gross domestic product in 2010 vs. 11.6 percent each for France and Germany). We get radically less bang for the buck than comparable nations.
    “…The death rate for Americans younger than 50, the report showed, is almost off the comparative charts. A range of exceptionally American factors — car usage and lack of exercise, junk-food diets, violent deaths from guns, high numbers of uninsured and a concomitant lack of treatment, the high rate of poverty — all contribute to this grim distinction. Of the 17 nations studied, the United States ranks first in violent deaths, at roughly three times the level of second-ranking Finland and 15 times that of Japan, which ranked last.
    … at age 65, Americans enter a health-care system that ceases to be exceptional when compared with the systems in the other 16 nations studied. They leave behind the private provision of medical coverage, forsake the genius of the market and avail themselves of universal medical insurance. For the first time, they are beneficiaries of the same kind of social policy that their counterparts in other lands enjoy. And presto, change-o: Their life expectancy catches up with and eventually surpasses those of the French, Germans, Britons and Canadians.”

    We have to think about our grandchildren. Time is of the essence. If we don’t cut social security and medicare now, before it’s too late, our grandchildren will want them.

    • lrh says:

      Meyerson presents a study with an intriguing fact. The US life expectancy rate as compared to other nations improves dramatically as the US population celebrates its seventy-fifth birthday.

      But then instead of analyzing and dissecting a long list of possible cause and effect links or citing someone who does, Meyerson concludes in large part this is because our world ranking changes after Medicare kicks in, the change in world ranking is therefore caused by Medicare kicking in. “And presto, change-o: Their life expectancy catches up with and eventually surpasses those of the French, Germans, Britons and Canadians.”

      Isn’t that a textbook logical fallacy heuristic or am I reading him wrong?

      • 873450 says:

        It ain’t magic. Meyerson ended his summary on a humorous note to emphasize his point. We do have the best healthcare available in the U.S. It’s just not delivered properly or efficiently (where fortunes are made). We spend so much more for it, yet until recently (let’s see what happens) 15%-17% of the population, 45-50 million American citizens, had no access to it. That’s how we ration. Those are our death squads. Americans surviving to age 65 gain access to an American universal healthcare system and they live longer. But that’s socialism and it has to end if we want our grandchildren to know what freedom is.

      • lrh says:

        Best healthcare? Okay. I’ve found a lot to admire. “Not delivered properly” and “not delivered efficiently?” I can’t argue there. I’ve just had a very hard time getting a clear definition of what proper and efficient means in health care delivery.

        Also the 45-50 million figure needs to be analyzed further if we are going to create a proper or efficient solution. Some are uninsured by choice, some are not “American citizens,” some have government programs available but are not enrolled, some have fallen through the cracks, some can’t afford and so on. A one-size-fits-all solution is unlikely to be efficient. The answer for each grou differs.

        And a lot of uninsured patients do have “access” to a part of the health care system as one of the many patients receiving billions of dollars in uncompensated care from hospitals. One mid- sized, not for profit hospital group I know of budgets over 100 million dollars each year for those patients. So the words “death squads” seems overstated.

  57. postpartisandepression says:

    The experiment has been run and americans and american politicians choose to ignore it

    ALL first world countries provide better healthcare for half the cost because they have single payer or highly regulated private insurers. NO ONE goes bankrupt because of catastrophic illness in those countries. ALL people are covered and everyone pays into the system. It works. It is fair. And it it is what any civilized society should want to achieve. It says a lot about our society that we are even having this discussion.

    Medicare already covers the sickest of the sick for a reasonable amount of money and should be expanded to include everyone. It is simple , it works and would only have to be tweaked around the edges (so how are hearing aids not covered for old people???) . So for all the talk by “very serious people” they do not want cheaper healthcare they just want make sure no one gets anything from them free. Facts mean nothing. Data means nothing. Pretty sad.

  58. postpartisandepression says:

    PS my daughter was just in the emergency room a few weeks ago for a fainting spell at school. They did a cat scan, some blood work and said they couldn’t find anything wrong. And the bill was more than $10,000. Good old american ingenuity for you- how to stick it to a college student.

  59. postpartisandepression says:

    And this is a surprise to you?

    The US’s problem with its healthcare costs comes from a few very treatable problems:

    1) Buying healthcare is not like buying widgets and doesn’t benefit from shopping around. If you are really sick you are not going to argue with your doctor about what tests he wants to run and what treatments he wants to do. And when the hospital and everyone in the loop gets paid based on what the tests they order you get lots of tests. Even if you go for a check-up you either develop a relationship with your doctor or you go the local doc in the box and get inferior treatment. Most importantly most patients aren’t in a position to know what treatments or drugs are best for them and TV is no place to to learn what to ask for in your doctors office.

    2) High cost doesn’t equate to good doctors. The US is the only country in the world where an MD is a graduate degree. Every other advanced economy runs perfectly well with doctors who have undergraduate degrees. The AMA has such a strangle hold on the number of doctors and medical schools that when we have a shortage of doctors (primary care) we need to fill it with doctors from mostly third world countries – my bet is your GP was not trained in the US. Is outsourcing of a good service job something we want to encourage so a few of the specialists can charge lots of money?

    3) At every stage we insert a third party in the process in the form of insurance companies and so costs soar. Costs are contained if the person negotiating the price has lots of patients so an individual who is “shopping” around will get a much higher quote than someone whose insurance company has negotiated a cheaper price. The toughest negotiator is the one with the biggest patient base- and that would be medicare. The “so called” private insurers are grateful for government interference because otherwise they wouldn’t even be able to get the prices they get.

    4) insurance works because everyone is afraid they might get sick and buys coverage. Healthy people need to be in the system so that the sick can be covered for a reasonable price. The system we have now where you pay into it all your life until you get sick and then they can kick you off isn’t good for society or our pocketbooks. Remember the people we leave in our “great” private system are the least sick because most healthcare is consumed by those over 65 and for that we have medicare.

    Single payer solves the problem.

  60. Bjørn says:

    Attorneys buy billboards to advertise “Divorce $150″.
    Car dealers advertise “$100 over dealer invoice” and free 35 point “safety” inspections.
    These ads are meant to bring in the suckers. It is after all a free/competitive market environment.

    Let’s say a doctor or hospital advertises free cholesterol, blood pressure and glucose testing. Is this a come on?
    When these free tests are abnormal each patient is directed towards a provider (no matter if they are insured, unemployed or unemployable). Is this wrong??

    When you enter a car dealership the first thing you notice is all the employees walking around. You and maybe one or two others are there shopping. Who pays for all these employees and what is their function?? Does an unemployed car purchaser with no credit rating get the least expensive car for little or no cost??

    US Medical care is a complex process. You as a patient will demand the highest quality (and quantity) of experienced personnel and the most up to date technology and other infrastructure because you know it will increase the probability of a satisfactory outcome in a timely manner. After all, it’s all about YOU.

    So the next time you enter the medical arena be sure to ask for the least experienced doctor. And ask that the janitor set your broken bones.

    No one likes it, doctors are forced into relationships, overworked understaffed support staff go home emotionally worn out and wonder if it’s worth the hassle, hospital administrators are challenged at every turn to provide higher quality at lower cost (for years).

    Politicians and economists and the lay public have been on the case for decades. And believe it or not there have been tremendous improvements.

    And lets not even discuss “socialized medicine” because we all saw how things went when we “socialized the banking system).

  61. Nedland says:

    We will never get cost under control until we get rid of third party payer healthcare.

    I have developed a new form of healthcare called “Group Self-Insurance”. Individuals would self-insure, but a group of self-insuring individuals would collectively pool resources to cover catastrophic health events. Since the agent managing the process has no health cost liability, medical advice from the agent is unbiased.

    Healthcare costs could be cut by at least 50%, with better care.

    This new form of healthcare could actually operate within Obamacare.

    For a YouTube on this, see: http://www.youtube.com/watch?v=tIZIXPL3HxI

  62. hr says:

    Echo Transthoracic
    Supervised Cardiovascu Stress Test
    Cardiovasc Stress Test; Interp/Rpt
    Total: 1,544.00

    Echo Exam of Heart
    Total: 1,217.00
    http://medicalpricing.files.wordpress.com/2013/02/1-echo-copy.jpg

    Echocardiography FEC
    Total: 1,296.00
    http://medicalpricing.files.wordpress.com/2013/02/2_echocardiography-copy.jpg

    Venipuncture in Lab
    Lipid Panel
    Hepatic Function Panel
    Vitamin D, 25-Hydroxy
    Total: 333.50
    http://medicalpricing.files.wordpress.com/2013/02/3_blood-test-copy.jpg?