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Table
Source: Economist

 

The US costs for hospitalization are wildly out of whack with the rest of the modern world. Why is that?

Discuss . . .

 

Category: Economy, Really, really bad calls, Science

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.

47 Responses to “Discuss: Surgery Required”

  1. ConscienceofaConservative says:

    A big part of the costs are insurance premiums necessary to defend doctors and hospitals against mal-practice. Tort reform is one step that we could take to reduce patient cost. It’s not the only item, but a good first step.

    ~~~

    BR: Every study ever conducted by statisticians who are not Bonobo monkeys (or paid shills) reveals this to be a tiny percentage of the total $2-3 trillion US health care industry — well under a percentage of costs.

    Those of you who advocate eliminating your constitutional right to pursue a wrong in court are shills for your corporate overlords. This is not about efficiency, its about capturing and keeping profits at the public’s expense.

    One day you will rue the fact you ever peddled this corporate bullshit . . .

  2. Iamthe50percent says:

    Why? Because the rest of the civilized world has the dreaded “socialized medicine”, which, by the way, Obamacare is not, although Medicare is.

  3. pm2416 says:

    Maybe capitalism isn’t the solution for everything? There, I said it.

  4. billybob says:

    30% is waste and fraud. The lack of electronic health records and serious front & back office automation are huge contributors to costs. Insurance middlemen are another.

    Ain’t it great to be seriously “exceptional”?

  5. raholco says:

    I think this is symptomatic of a system that has wildly gotten out of control on so many fronts: hospitals, doctors, ‘insurance’ plans, pharmaceuticals, you name it. It’s gotten so bad that a new class of MD’s has arisen out of the chaos called ‘Hospital medicine’ with an even further sub-specialization of those who work the graveyard shift being called ‘nocturnists’. Yet another example of American Exceptionalism, with a huge caveat: “Yes, we do have the best healthcare around….if you can get it paid for you or you pay for it.’.

    As Dean Ornish noted many years ago when he did his landmark work on reversing heart disease: He gets paid big bucks by ‘insurance’ for a cardiac stent procedure, but when it comes to education there is zero reimbursement. Then you get the catfights where many of the new cancer drugs only improve the life of those treated by six months at a horrendous multi-hundred thousand dollar bill just for the drug alone-and of course very little has changed in many cancer treatments where the anti-neoplastics are so toxic in of themselves you have to wonder what will kill you first-the cancer or the treatment? And to top it off, we have a schizophrenic Federal government doing it best on the War on Drugs to crack down on marijuana use when the states are poking the Feds in the eye over their dispensaries. Even worse, we’re losing those physicians who are being denied license renewal from the FDA/DEA over the use of tryptamtine and other enethogens as possible psychiatric treatments.

    When it come to Big Pharma, look at their 10K’s and see where the money is really being spent. Here’s a hint-it isn’t in research. The US and New Zeland are the only places where direct advertising to citizens from Big Pharma firms occur. And then there’s the nice little history about Ziduovine, which was created by Wayne State University doctors as a cancer treatment back in the 1970s under the idea that cancer may caused by viruses. Fast forward to the late 1980s when Burroughs Wellcome manged to re-patent it for treatment of HIV infection.

  6. IanMud says:

    A few thoughts:

    - Fee for service rather than outcome encourages unnecessary tests and treatments
    - High costs related to litigation that tend to be nonexistent or marginal in a public health system
    - Protection from litigation encourages unnecessary tests and treatments
    - High cost of becoming a doctor must be recaptured
    - Administration costs driven by abnormally high executive pay/headcount and complex compliance
    - We have been slow to automate our information systems and reticent to allow them to share data
    - Artificially high prescription costs driven by legislation designed to protect drug companies

    And not only do we cost more, but our outcomes tend to be mid-pack

    ~~~

    BR: Every study ever conducted by statisticians who are not Bonobo monkeys (or paid shills) reveals this to be a tiny percentage of the total $2-3 trillion US health care industry — well under a percentage of costs.

    Indeed, simple hospital errors cost more than all medical litigation.

    Get your facts straight and keep that weak ass shit outta here.

    • IanMud says:

      Barry, You are absolutely correct in your assertion that I had overestimated the impact of litigation on medical costs but are perhaps selective in your data assertions.

      The most reliable study I could find pins the cost at about 2.4% in 2008 (and likely higher for hospitals, which are far more guilty than doctors of practicing “defensive medicine”).

      While this may not seem material, the point of the exercise was to look at why US costs were so high relative to other countries. If accurate, at 2.4% of total costs, this adds more than $100 per US hospital stay per day. If France (the midpoint nation cited in the chart), had the same $100 problem, their hosptial stays would cost them 12% more. I would say that while litigation costs are small on our scale, the amount is material when performing a comparison.

      • Um, no:

        That study (discussed here) notes that even the 2.4% number is wildly inflated. Why> Because of the $55.6 billion, $45.6 billion is due to “”hospital as opposed to physician services” — anumber attributed to defensive medicine, but widely disputed as a best guess.

        The study notes that “Settlements and court judgments chalk up $5.72 billion” — making the actual, measurable costs less than a quarter of a percent.

        Giving the large number of preventable deaths, misdiagnoses, surgical, errors, and other issues of bad medicine — IM TALKING TO YOU STATE MEDICAL BOARDS — that preventative medicine cannot be pinned on litigation as much as the medical inustry’s own tolerance of incompetence.

  7. Malachi says:

    It’s because of Obamacare. Oh wait, that hasn’t happened yet.

  8. RW says:

    Weak to non-existent price signals, moral hazard and multiple market failures, a byzantine finance/remuneration system, all the symptoms of an enterprise with a poor fit to nominal capitalistic structures.

    A ‘simple’ case in point:

    Mark-ups of prices of several hundred percent over audited costs are routine in hospital bills. These are not hidden cross-subsidies, either; they emerge on the yearly audit as multi-million dollar “losses”, neatly balanced by “contractual allowances”. Translated, these are discounts to insurance companies.

    Why do hospitals raise prices, then turn around and discount them? Why do they overcharge, then call it a loss when they write it off?

    Good question. Sure it’s a pretty good profit when the hospital collections dept can make the inflated charges stick to some poor schlep who lacks insurance but loss write-offs have other business uses and there it gets more complicated. So that may be the bigger picture: Complexity is a source of leverage to those who understand how to work it.

    • lrh says:

      They ask: “Why do hospitals raise prices, then turn around and discount them?”

      Why do media companies have a rate card for space or time that nobody pays and give “value added” free spots, guarantees, rebates and merchandising besides deep discounts? Why do hotels and airlines have rack rates and then offer yield management pricing that has a different price for each seat? Why does my NYC apartment have a base rate in the lease that’s 66% higher than the rent (which itself is a fortune)? The list could go on and on to include lawyers, financial people, I’ll bet even politician give discounts on their graft.

      Maybe it’s for the same reasons.

  9. rd says:

    No particular order

    1. Very poor metrics to figure out what really works to increase efficiency and efficacy.
    2. Too many layers of administration with additional costs, usually associate with the myriads of billing arangements.
    3. Excess profits to providers without providing commensurate benefits (similar to excess fees paid to Wall Street for lower returns than the indices).
    4. Too little focus on keeping people out of hospitals creating unnecessary and longer stays.
    5. Inability to communicate best practices across multiple institutions and providers.
    6. Tort liability

    • rd says:

      One of the major missing pieces to control costs is primary care in poor areas. Here is an interesting story on the difficulty of doctors from other countries getting licensed in the US to work. It should be very doable to get these doctors to serve for a number of years in areas that really need primary care physicians, especially doctors that speak the languages of their patients:

      http://www.cnn.com/2013/07/04/health/latino-doctors/index.html?iref=allsearch

      One of the biggest problems with the medical system in the US has been the downgrading of primary care so that much more is required of specialists and hospitals. One of the major cost-saving measures in other countries (Canada for one) has been the focus on having as much care as possible delivered by primary care physicans on an ongoing basis to reduce recurring hosital visits and expensive procedures. Since many of these systems are single-payer, these systems will also go to almost any lengths to keep people out of hospitals, even paying for in-home care visits to make sure that basic chronic health needs are addressed. In the US, the health insurance system almost mandates that you have to enter hospitals to get services that many other countries can do at home with 1 hour visits.

      BTW – the most baffling part of the US health care system to me has been the much greater number of diagnostic machines, such as MRIs, available per capita yet the costs for those tests are high compared to other countries. I thought traditional free market supply-demand theory dictates that the price drops as supply exceeds demand. This alone is proof to me that, although it is largely private, the US health care system is anything but a free market.

  10. Whammer says:

    Because America!!

  11. ciwood says:

    I had surgery 4 weeks ago. The bill was 10,443. I paid $100 and blue cross paid $2,166. Evidently the hospital was happy and profitable at 20% of the billed rate. At that rate, our costs or closer to Chile. I can only assume the data we are fed is questionable and/or the rate is this high because of the non payers. If BCBS can negotiate a rate like this, I assume the government can also but the non payers need to be eliminated.

    • Jayhutchins says:

      International Federation of Health Plans should be actual costs, not published prices.

    • cschene says:

      I believe just about anyone with insurance pays the negotiated rate that you paid. The billed charge or “rack rate” is the rate at which those with our negotiated rates are charged, normally the uninsured.

      The chart shown in the Economist article is showing actual charges paid, not the “rack rate” (10.443) that you referenced.

    • RC says:

      I think you probably already had met your yearly deductible. Otherwise the “discount” magically reduces such that it would first try to max out your yearly out-of-pocket.

      The most corrupt practices in healthcare are done in Hospital billing.

      From hospitals who charge 4 to 5 times, to Doctors who over test and over operate to fill their pockets, the healthcare system is infected by corruption. Only the “sunlight” of free and true open market can disinfect it.

    • Frilton Miedman says:

      That was attempted with the proposal of a government option, FOX screamed “Government takeover” all over the air waves and immediately went about the far more important business of investigating Obama’s birth certificate.

  12. cschene says:

    Most non elective medical care does not respond to free market forces and should be price controlled except in cases where people can make well informed consumer choices. The lay person does not understand the complexities of medical care and is not able to make an informed market based trade off. We pay twice as much for our medicines in large part because our pharmaceutical companies are protected from foreign competition and Medicare cannot bid competitively on drug prices (a gift from the GOP and GW).

    When our seniors and poor citizens started going to Canada for lower priced drugs the pharmaceutical industry went crying to George Bush and rather than act to lower prices, George bush ordered that that US border guards only allow a two month supply of medicines to be carried across the Canadian border and then gave us the Medicare drug plan, which is really a gift to the pharmaceutical companies. So much for GW’s belief in the “Free market economy.” It is a free market economy for our wages and the goods we buy but big phama gets government protection from having to compete in the free market.
    Our providers are paid based on how many procedures they perform and the more expensive the better and so not only is there little incentive to keep people well, we drive our medical students away from the cost effective primary care to the expensive specialties.

    I consider it to be a great moral evil in the US that the working poor, many of whom don’t have employer sponsored insurance or can’t afford to pay for insurance themselves, are charged the highest “rack rate” available so even the meager savings that they may have accumulated will be confiscated by the medical money changers or they will be forced into bankruptcy. Most of the working poor have to make a choice between proper medical care and providing basic living necessities for their families.

    The biggest racket of all: “non profit hospitals”

    Nearly all first world countries provide universal healthcare at much lower cost and with better health outcomes than the US provides and even then there are nearly always private choices for those of better means and it costs far less than the 20% of GDP that our inefficient and ineffective healthcare requires.

  13. Bob A says:

    Because ‘free market capitalism’ is the most efficient way to manage a nation’s healthcare system. Of course. I’m sure Larry Kudlow will agree wholeheartedly.

  14. martin66 says:

    The Charge Master among many other causes, as explained in full by Steven Brill in his Time mag article earlier this year.
    http://www.time.com/time/magazine/article/0,9171,2136864,00.html

    • cschene says:

      Checking the published rates for elective and planned procedures are a great idea but for emergencies and especially life threatening emergencies we have to take our first available choice is most cases.

      My uninsured daughter suffered a near fatal pulmonary embolism that resulted in 23 total days in the hospital with one surgery, 3 days in ICU, 12 days in CCU for a total bill of just short of $500,000: Nearly 13 years of her young families income. She was charged the rack rate, of course.

  15. Internet Tourettes says:

    Inelastic demand for for a service in a non price regulated market…..and thats what makes this county great (not).

  16. cschene says:

    “The US costs for hospitalization are wildly out of whack with the rest of the modern world. Why is that?”

    Because our healthcare system economically incentivizes providers to perform more and more costly procedures and because we have a drug industry that is protected from international competition.

    Personally, I think healthcare costs should be price controlled.

  17. farmera1 says:

    1. We spend 60% more of our GDP on health care than any other country.
    2) We have terrible out comes, we measure last for any industrialized country in infant mortality and longevity
    3) If the intent was to develop the most screwed up, inefficient system our system would be worse.
    4) All other major industrialized countries have a single payer system.
    5) Our doctors get paid piece work rates, the more operations, the more they make with a few notable exceptions like Mayo Clinic and Cleveland Clinic.
    6) Our hospitals are probably the unsafest places to be, because of misuse of antibiotics and piss poor management (nurses and doctors not washing their hands for example).
    7. In this country more antibiotics are fed to cows, pigs and chickens you are going to eat than humans take. To get animals to grow faster, antibiotics are fed at low levels. Just the perfect way to produce drug resistant bugs.

    You want me to go on. Our “system” is screwed up, period.

  18. tooktheredpill says:

    Yean health insurance is a massive rip off in Australia. We pay because we are willing to and are coerced into it, as the uninsured pay a levy (think it is about to go up to 2% of your salary). I stopped paying for insurance as soon as I saw that I got charged more for being insured (not sure how widespread that practise is). Overall actual costs seem to be half that of Singapore, yet they are not even on the list! (but then again it is the Economist =)

  19. bear_in_mind says:

    It’s a corrupted system where the most well-heeled get not only the best access, quality and service, but frequently the most affordable care options as well. Yet another area where the divide between the haves and have-nots has grown by leaps and bounds. Many think that all poor, low-income and working class citizens qualify for Medicaid. They’re dead WRONG. Thus, it’s not unusual for the uninsured and under-insured to get charged retail “rack rate” prices for medical services, which helps explain why the number one reason for consumer bankruptcy in America is medical debt. It’s a complete travesty.

    There’s a great Op-Ed in today’s NY Times covering this very issue… check it out!

    Diagnosis: Insufficient Outrage
    The New York Times
    By H. Gilbert Welch
    July 4, 2013
    http://www.nytimes.com/2013/07/05/opinion/diagnosis-insufficient-outrage.html

  20. intlacct says:

    Everyone else has nationalized health care, no?

    Read the Elizabeth Warren article, or BR’s abt speaking with colleagues in some Northern European country and concluding that, in spite of lower tax rates, where ultimate OOPs (out of pockets) was remarkably similar. The US is in dire need of heavy doses of socialism. And a massive common sense transplant.

    The question needs to be enlarged: why do we stand idly by while our fellow citizens, our neighbors, their kids: don’t get preventive care? can’t get insurance? declare bankruptcy every 10 minutes or so due to medical related bills they can’t pay? Why are we comfortable screwing those least financially/educationally/genetically endowed? Why do we afflict the afflicted and comfort the comfortable?

    IA

  21. Willy2 says:

    1. In an attempt to reduce costs the gov’t has introduced a lot of rules. This requires a lot of extra paperwork.
    2. The same story applies to those HMOs. (Health Care Management Companies). In order to reduce costs hospitals and people working in the health care sector are buried under tonnes of extra paperwork.
    3. There’re a number of stock exchange listed Hospital groups/companies. They want steady rising profits. So they are lobbying state and federal government to introduce legislation that increases their profits. Monopolizes their position. And all that money comes out of the hide of the taxpayer (Think Medicare, Medicaid).
    4. In 2006 Medicare part D was introduced. It increased the coverage for senior citizens increasing the costs for the US government. But it also contained legislation that made it illegal to import drugs from abroad for ordinary citizens. This allowed drug companies to steadily raise the price of drugs.
    What do you mean “free markets” ?

  22. bobmitchell says:

    ci- ya think? You “paid” $100? How much does your employer “pay” for your health insurance? Normally this would be called a “wage”, but you never seen it.Money being paid out of your employer on your behalf.

    BCBS is still way ahead on the year, BTW. Even after “paying” 20% of the billed rate, they will easily “make money” off your policy this year.

    I think at least some of the reason for the hospital costs can be traced to the demand for muni hospital debt. I heard from a hospital billing agent the other day that a room “costs” 10k a night. $9 an hour for a nurses aide split between 10 rooms, and how much for rent? Why are we renting a non-profit, government subsidized and sometimes “owned” hospital?

    Wall st need product, and a place to stash their cash, Munis. No better hostage when entering “bondholder negotiations” than a whole hospital full of sick people.

  23. constantnormal says:

    It’s not just the hospitals — the health insurers use these exorbitant rates as an excuse to justify jacking up their rates for anyone lacking the clout to negotiate massively lower group rates, such as small businesses and individuals.

    The entire health care industry has been corrupted by a lack of competition and a movement away from the non-profit modus operandi of several decades ago, despite retaining their non-profit IRS status. “Profits” are hidden beneath a blanket of writedowns that serves to support high prices and high salaries everywhere, a curious state of affairs that can only exist within industries that lack competition.

    Also, there are multiple agencies that act to maintain high barriers to competition, from the AMA, which enforces a doctor shortage and encourages supply misallocation via the specialist system, to the FDA, which makes even the simplest tools rise in cost hugely through unnecessary regulatory practices.

    There was a story a while back about some hospital with a cost-conscious facilities department (a rarity) that replaced an industry device for evaluating patient balance skills costing tens of thousands of dollars with a $200 Wii fit device that performed comparably. Yet no wave of competition swept through the industry in this area. Why bother? To do so would lower costs, and ultimately lower departmental budgets. No manager anywhere gets fat salary increases or promotions for lowering their departmental budget.

    There is zero real pressure for cost containment in the health care industry. And why should there be? The alternative to our health care system is ultimately death or crippling illnesses. It’s no coincidence that the number one cause for personal bankruptcy in the US is (and has been for a long, long time) health care expenses. “First, do no harm” indeed.

    Obamacare helps to maintain this corrupt mess by blocking healthy customers from exiting the system and going without insurance, ultimately to either die without medical treatment, or to arrive at an ER with no ability to pay and the worst-case treatment options.

    A proper health care overhaul would have at a minimum, instituted price discovery and transparency via up-front published rates for everything, and promoted competition among mega-hospitals. Instead, we see ever-larger networks of hospitals with massive construction budgets and humongous salaries at every level, making even our military (which also has zero competition within our society) look cheap and efficient.

    Absent competition, the only other possibility for reform would be removing the ability to milk smaller customers via the single-payer option, which conservatives utterly refuse to consider, preferring the existing oligarchies with their monopolistic practices.

  24. constantnormal says:

    In the state of Indiana, one mega-hospital network runs TV ads proclaiming that 80% of the physicians in the state practice in their network. Apparently, monopoly status is seen as a drawing card for customers, with zero possibility of antitrust investigation.

  25. Expat says:

    Tort liability is a red herring created by the AMA, Big Pharma and the HMO’s to justify high prices. They always cite the famous McDonald’s Hot Coffee Case but fail to explain the full story. The AMA is a lobby and a fraternity designed not to maintain standards but to protect its members and limit the number of practitioners. Big Pharma tells us they spend 75% of their budget on R&D when it’s really more like 75% marketing and lobbying. HMO’s are capitalist ventures designed to make money; if that involves killing people or overcharging, then that is acceptable, nay laudable. Finally, we have the insurance industry whose very business model is based on denial of service! And with Congress deep in their pocket, the insurance companies can gleefully deny coverage without repercussions.

    America needs to decide what it is. Is it the nation we learn about in elementary school and even, sadly, college? A nation of ideals and freedoms? Where the poor, minorities, and refugees of all ilk can bask in the warm glow of liberty from oppression safe in the knowledge that their nation will protect them from ALL enemies foreign and domestic?

    Or is America a fascist regime where nothing matters but money and guns? Where large swaths of the population are ignorant bible-thumpers who decry Big Government while lauding border fences, profiling, the War on Terror, NSA spying, an unfettered Congress, and the largest socialist program in history for the benefit of Wall Street? Where poor, sick people are to blame for being sick and poor? Where black and Native Americans should get up off their lazy asses, stop drinking Ripple and get jobs? Where capitalism is good even when it means ten thousand dollar broken arms and medical bills being the leading cause of bankruptcy?

    It’s all about money. In the end, we all pay more one way or another. Either we pay taxes to fund public emergency rooms or we pay higher premiums and medical bills. The evil, socialized medicine in France, Canada, Sweden, Switzerland, Norway, etc. costs far less as shown. It delivers far better medical care on average.

    Perhaps if our leaders were forced to live like real Americans and pay for their own, mediocre medical care, they would not support Obama care and support a general, social medecine? Or perhaps not since most of our elected officials are in the top 1% and can afford the best anyway.

    America is dead. Amerika is strong.

    • BennyProfane says:

      “Perhaps if our leaders were forced to live like real Americans and pay for their own, mediocre medical care, they would not support Obama care and support a general, social medecine? Or perhaps not since most of our elected officials are in the top 1% and can afford the best anyway.”

      Yes, when 90% of our elected representatives are relatively wealthy, and, at the same time, covered by you and me, the taxpayer, with triple AAA health plans for life, then, how could we possibly expect for this situation to change.

  26. ilsm says:

    There are costs aside from monetary!

    I am over 60, retired military with secondary employer related insurance.

    About 10 years ago decided to have a primary care Dr., annual physicals, etc. Surprising how “worrisome” my health situation became.

    Risk management, maybe over(pre)subscribing but having a bit of background in Ops Research cost benefit was to go with it (I stopped smoking decades ago). Taking statin to reduce one of the few “risks” I have of heart attack. After listening to my annual admonishments about self prescribed doses of good dark beers and red wine to prevent tumors………. we discovered I have a congenital condition and need to give up my daily dose of beer or wine. Drat!

    Amazing how easy it is to be 10# lighter, while going into the gym several days a week.

  27. scottinnj says:

    The NY Times has been running an excellent series on ‘why are the US costs so high”. Here is an article they ran about the high cost in the US on colonoscopies.

    http://www.nytimes.com/2013/06/02/health/colonoscopies-explain-why-us-leads-the-world-in-health-expenditures.html?pagewanted=all

    But for her routine colonoscopy this January, Ms. Yapalater was referred to Dr. Felice Mirsky of Gastroenterology Associates, a group practice in Garden City, N.Y., that performs the procedures at an ambulatory surgery center called the Long Island Center for Digestive Health. The doctors in the gastroenterology practice, which is just down the hall, are owners of the center.

    That explains the fees. “If you work as a ‘facility,’ you can charge a lot more for the same procedure,” said Dr. Soeren Mattke, a senior scientist at the RAND Corporation. The bills to Ms. Yapalater’s insurer reflected these charges: $1,075 for the gastroenterologist, $2,400 for the anesthesia — and $2,910 for the facility fee.

    When popularized in the 1980s, outpatient surgical centers were hailed as a cost-saving innovation because they cut down on expensive hospital stays for minor operations like knee arthroscopy. But the cost savings have been offset as procedures once done in a doctor’s office have filled up the centers, and bills have multiplied.

    It is a lucrative migration. The Long Island center was set up with the help of a company based in Pennsylvania called Physicians Endoscopy. On its Web site, the business tells prospective physician partners that they can look forward to “distributions averaging over $1.4 million a year to all owners,” “typically 100 percent return on capital investment within 18 months” and “a return on investment of 500 percent to 2,000 percent over the initial seven years.”

  28. lrh says:

    Doesn’t the article say the final tab was $3,500? Why quote the list price like some mattress salesman or Priceline with a phony 4 star resort fantasy room rate?

    This discussion needs wide open books from all sides; for and no profit hospitals, insurers, the single payer advocacy groups, other countries… everybody.

    The Economist itself is guilty of leaping to conclusions without opening their books. In the source article they write “Most [of the 5,700 hospitals in the US] share a familiar business model: sell as many services as possible at the highest price.” So where’s the link to the data that proves that point? I asked, they ignored.

  29. DeDude says:

    In a “predatory capitalism” infested society anything that is run as for-profit, becomes all about the profit. So why do hospitals charge such an absurd amount of money – because they can. None of the market mechanisms that normally will keep prices in check work in medicine. Those who “order” the “health” product are not and cannot be “informed consumers” that shop around for the best product at the best price. Those who deliver the product have no incentives other than to give you the most expensive product they can regardless of whether you need it or not.

    The sick scared patient who has no clue what is going on, is easily sold on the need for a scan “to make sure we are not missing anything”. The doctor may have all kinds of excuses and even convince himself as he conveniently responds to the administrators demand that the new scanner gets used more, so the hospital can make a profit on it.

  30. constantnormal says:

    I thought I should document my claims of a story about using a Wii Fit in hospitals, so I googled it. Several instances popped up, in various hospitals, but I saw none that represented hospitals or any other health care facilities in the US doing this … some links …

    http://www.ncbi.nlm.nih.gov/pubmed/22898573

    http://www.nintendoworldreport.com/news/17484

    http://rhetoricofgaming.wordpress.com/2012/10/16/wii-fit-use-in-geriatric-hospitals/

  31. Diablo says:

    why? because the rest of the world realizes that healthcare is a basic human right (like education, roads/bridges, and defense) that society as a whole has to pay for (via taxes…get over it).

    in the USA, its a profit center.

    its disgusting.

  32. Cesira says:

    Best summary–or at least the loudest–Paul Hipp’s modern mozart cantata on where US healthcare ranks in the world a few years ago–”We’re Number 37″ – Paul Hipp

    http://www.youtube.com/watch?v=yVgOl3cETb4

  33. Dr.Sardonicus says:

    Comment: I am STUNNED at how little real-world experience it requires for someone to become DEAD certain that they know the solution to a very complex problem. BR- So far as I can tell from your bio, you haven’t spent a single minute in a hospital, behind the scenes, watching what happens.
    I have spent 38 years doing that.
    I have also spent time as a patient, and as an advocate for ill family members.
    I am deeply concerned about the costs of medical care currently, and I can see that most of the efforts at cost control are totally misguided.
    I have written at some length about this on a small blog I maintain, mostly as a notebook for myself:
    http://dr-sardonicus.blogspot.com

    Here is the abstract:
    1) malpractice distortions in medical care: Barry, I think you ARE correct that the direct costs are a fraction of a percent. Totally ignored in your discussion, though, are the indirect costs. As a radiologist, I see the numbers of cases that come through the ER and get big-ticket scans. A small percent add to care. When I approach the ER docs about perhaps not ordering more, I am told that 1) 1 in 10,000 head bumps will have an epidural hematoma 2) the ER doc will see 10,000 cases like this in his career and 3) if that 1 person comes through the door today, his career is over. He goes on to tell me that the cheapest malpractice insurance he can buy is a CT scan. That is just ONE of thousands of similar scenarios I see in my practice. When I am a patient, I refuse such scans.
    2) Hospital competition and profits: The hospital system I work in has $2Billion in cash reserves. They say then need it to treat the needy, and indeed they do treat some of the needy, but $2Billion??? The hospital competion in the area is for more and more procedures, and more and more luxurious patient rooms, NOT for better or less expensive care. The public areas in our area hospitals are so luxurious that they put the Ritz to shame. The hospitals have no incentive to economize on this, rather they are incentivized to bring in the well insured, high paying customers with the most beautiful rooms.
    3)Hospital advertising – a small amount, really, but the canary in the coal mine so to speak. Every $ spent on hospital advertising is money down the hole, not spent for improving care. And it is, in a very real sense my money. One of the hospitals in town has virtually carpeted the area with signs, even the little flags on the light posts in the shopping center down the street has their slogan on it. What’s worse is that (knowing how the other hospital really functions), what they are saying is 50% real, and 50% misleading.
    4) Physician self referral: as noted by another poster this is a large cost to patients, and the overtesting that results can result in real physical harm to patients. This is, in my opinion, a scandal and a blot on all of medicine. It is unethical. It was begun, however as a response to what essentially were arbitrary wage and price controls started by Medicare in the 1980′s. It was apparently thought that by reducing reimbursements to physicians, that total costs would go down. Silly, simplistic thinking by people who should have known better. When the reimbursements got below the cost of doing business, physicians sought other, ancillary cash flows, and started using their own testing facilities. So, the central planners as a result of their simplistic notions, basically caused this market distortion.
    5) Patient Expectations: Americans expect and often DEMAND that tests be done on them. A physician who tries to explain why the person does not need a test spends a lot of their time doing so, only to increase significantly their malpractice risk. Incidentally, I have done this often, because I feel it is in the best interest of the patient, but always cognizant of the fact that it is taking me 4 times longer to cancel a procedure than if I had just done it, and that I am making no friends, and possibly generating a lawsuit by doing it. Parenthetically, years ago a Canadian physician working in Boston was asked about using the Canadian model in the US. He said that it could work, except that the US was not populated with Canadians.
    6) High middle man profits – suppliers of EVERYTHING to hospitals have very high margins compared to any other segment of the economy.
    7) Insurance company profits – In Germany, if an insurance company wants to offer life, auto, etc, they must offer health insurance and do it for minimal, 1-2% profit. In the US, profits are far higher. As with hospital advertising, these profits are purely costs to the patients, without any benefit in terms of better care.
    8) Overtreatment of everyone, but most especially the terminally ill. In Europe, you will not see ICU’s filled with patients over 70.

  34. Frilton Miedman says:

    As long as bribery is considered free speech, no level of empirical data will sway a rule of law that’s written by those bribers, who make and break political careers.

    As demonstrated in the 2009 healthcare debate via sensationalist propaganda over “death panels” and “government takeovers” and immense political obstructionism.

    As with the banks, big oil, and most sectors, the for-profit healthcare sector owns us, our government and the rule of law.