What we don't see in this analysis is the percentage amount physician fees had increased between 1996 and 2013.
Why?
22
Because it's backwards, clueless and gives two hoots about healthcare. They have more 'sick' people than any other place on the planet. Just look at the news any day, starting with the POTUS. Insanity rules.
29
Look, I know you can’t compare apples with oranges, and that one country’s systems don’t compare or translate to another. But, my God, I’m glad not to be American, in terms of the cost and accessibility of general, average care.
I say this as someone currently waiting, as a public patient, to have tests done on a painful, chronic condition which I’m worried about, but have the patience to await. Part of that patience comes from knowing that the eventual cost to me will be either free, or utterly minimal, as our health system - struggling as it is - is paid for from the public purse: my taxes, everyone’s taxes, and government budgeting.
It’s the same system which also gave me surgery before, with a full surgical team, and pre- and post-checkups and consultations etc. The total cost to me? €70.
By contrast, I shudder at the utterly insane bills that appeared when one of my elderly parents was taken ill visiting New York - the first, of several, bill for little more than an ambulance being called and some basic hospital checks appeared for almost $10,000. What the hell?! (Fortunately, their standard, basic €100 travel insurance covered everything.)
America continues to lead the world with some incredible medical treatments and brilliant, pioneering work. But the cost - my God, the cost. I’d rather wait my turn in our struggling system, accepting those with greater need get priority, than be financially ruined by the costal. That, to me, is pretty sick...
105
The reporter have not follow the money correctly. The greediness of the medical education system with the support of the goverment and the banks sucks the money of the training physicians to such heights that there is no way for them to earn a living without the fees they are charging now. The cost of medical and dental education has tenfold in the last 40 years increasing the need to raise medical and dental fees so the providers can pay their student loans.
31
My wife suffered a compound fracture of her wrist while we were staying in Paris. The paramedics came and took her to an orthopedic hospital. There were no questions regarding insurance or anything beyond identity, which I handled in a few minutes. She had an operation to repair her wrist with a plate and several screws, and spent 2 days in the hospital. A cast was put on her arm and wrist. When we checked out, we talked to a lady, who said we could check to see if our insurance would cover it or pay it. I checked with our insurer and was told to pay it and submit the bill to them. The total charge was $2300, which I put on my credit card. When we returned to the US, a local orthopedist followed her recovery and told us he was impressed with the French doctor's work. She has had a very good outcome.
How much do you think that would have cost in the US?
84
It is because the businesses operating in this sector make more profit.....you are getting screwded by the system!!
32
Here's an insane idea...healthcare tort reform.
11
After reading the NewYork Times numerous articles for an hour this morning, I concluded the most difficult challenge facing the world today is to try and understand what is a"human
being."
8
Get rid of all the useless middlemen in healthcare and give that money back to the patients and to the doctors, nurses, scientists, and technicians who actually do meaningful work.
Of course, this means that millions of white middle class paper pushers with no real useful skills would lose their jobs.
42
Medicare works. It is a single payer system, Corporate citizen's want money not an effective working system.
The US has been built on fallacy. Now everyone realizes it. The end of the post WWII era leave the country destroyed.
This is apparent in its healthcare system.
24
The real reason the Americans pay twice as much for healthcare as the rest of the world is our government is owned by lobbiest. We pay their paychecks but they work or them.
If the health of our citizenry goes up against the healthcare industry's profits they side with them 100% of the time.
Now do you want me to explain why we pay more for our military than the next 13 biggest countries spend combined?
52
Greed. That's the only reason you need to know.
The issue never was access to healthcare or insurance. It's greed on every level of the provider and insurance chain.
43
Big health insurance companies have no incentive to control price rises year on year. They set premiums each year based on the next year's expected prices--whatever they are--so that they're covered. A healthcare system driven by large financial companies dooms captive Americans to suffer perpetual price increases and coverage decreases. And while Americans think they have greater choice in healthcare, it comes at a great price. Disagree? Compare: Under the US system, the cost gap between the US and the rest of the developed world grows unabated. https://www.healthsystemtracker.org/chart-collection/health-spending-u-s...
31
“Though the JAMA study could not separate care intensity and price...” The two are related. Services are itemized and billed to insurance companies and ultimately, often, patients. The more “intense” the care, the more profitable.
10
I work in a hospital, and all day long non-paying or under-paying individuals come to our ER and "waste" healthcare. No, I don't mean that the poor should be denied care for real issues. I mean that people come in for the least little thing (toothache, hangnail, social interaction) and thousands of dollars are wasted just to tell them "take an aspirin, see a dentist, eat a meal" or similar. Some patients literally return every day with no problem found but thousands of dollars of testing done each time. Why? Because our legal system requires that we test and treat everyone in legally defensible ways, very broadly defined. So, having learned that it costs them nothing to go to the ER and they will be treated very nicely (free meals, bed, a team of nurses waiting on them), some patients "malinger" wastefully while the rest of us pay. Universal insurance wouldn't help, the care would still be wasted and paid for by others. There needs to be a common-sense limit to this as no society can afford to so lavishly subsidize one group to the detriment of others. Nor can prices ever come down, while wasteful free care is bankrupting providers.
Again, I'm talking the waste of inappropriate ER use and the too-broadly mandated ER access of our laws. Not taking aim at the poor, but at limiting non-productive and pointless care that ERs are currently required to give to everyone, every time. That costs all of us, insurance or no insurance.
33
The article failed to mention that the insurance conglomerates tack on about 30% to the total cost of health care in the US... seems really high since their main job is book-keeping. Can't the AI robots do this without them?
26
No hospital runs ads covering cost of treatment or sales or whatever. Basically prices have increased but there is no way for consumers to know how much they are spending. Of course if you are sick and desperate you’re not going to compare and save even with advertised prices.
I also imagine the non profits find a way to funnel money to administrators and people at the top.
Nobody would design such a system and call it competitive or fair, yet the government and people seem to largely go along with it. Obamacare didn’t try to solve the price issue, notably, just coverage.
The next article should explain why prices were mostly in parity before 2003 and what happened since.
17
We must all understand that health care is not at all synonymous with health insurance. Health care is what health institutions provide to us, and for which they make a profit on every service rendered.
Health insurance is provided by commercial institutions who have no expertise in providing health care. They make a profit only by denying health care to their customers. Every claim they deny is money in the bank. Every claim they approve is a loss. What are they doing in this equation?
Finally you can be the biggest leftist in the room. Like me. Just remember that Obamacare never provided anything but health insurance. It did not and does not provide health care. There was that famous day when he announced he wanted "everybody at the table." That meant the insurance companies. That's like saying you want the criminals writing our penal laws. Everybody at the table. Ha!
19
The health care industry is the shame of this nation. There is a downside to ANYTHING good, and while American freedom is to be cherished, valued, and fought-for, the downside to that freedom is health care. There will NEVER be a national health care system, NOT with so many industries profiting from drugged-up (I'm talking big-pharma) Americans who are pushed into taking a pill for every little ailment or minor pain, plus, there are simply too many profiting stakeholders. The health care industry has more lobbyists than any other industry and always will. Any time the American Medical Association is threatened with new ideas that fall out of the "western" idea of health care, it races to protect its own (poorly trained doctors). The fool this great nation has in the White House is only making things worse. Hospital costs have skyrocketed, and patients are charged outrageous amounts just to have an attending physician step foot into their hospital room. It is thievery on a sickening scale. The only way to get back at this greed-driven industry is to stay healthy, eat the right foods, and exercise. For those born with a genetic condition or those who suffer a catastrophic condition, we can only hope for an honest and compassionate physician. Yes, the price of being an American is enormously high, and that price is the health care industry. Now, swallow your pills.
18
This comes as no surprize to me.
I self-cath and use about 200 catheters a month. They cost around $4000/per month.That is not a mistake. I don't pay anything as it is covered by Medicare and my secondary insurance. Medicare reimburses the supplier around $1400/month. I have had trouble in the past getting my supplies in a timely manner and so I investigated the idea of buying them on my own to supplement the covered supply. I can buy them online for around $20 per box of 30 or what would be a total of approximately $150/month. When I spoke to medicare about this they only said that the $1400 is what is authorized and didn't care that they were being grossly over charged. When I spoke to my doctor about it she said "Of course. We have a broken health care system. What did you expect."
I expect reasonable prices for health care supplies and in fact all of health care. I expect Medicare to care about what it pays for supplies because all of our taxes go to pay for them. I expect everyone in the health care system to work together to serve people at costs that make sense and to work to rectify overpricing when it is discovered. I guess my expectations are what is unreasonable not the cost of my catheters.
39
I have been on Medicare for 2 years now. After a lifetime of outrageous premiums, denied coverages, pre existing conditions and excessive deductibles, I finally have great healthcare. But sorry compatriots, according to Republicans it is too expensive for you, it would be Socialism if you had it and it would cease to be the best in the World. Ha!
26
"We spend more on health care because of the prices." Um... how about telling us WHY the prices are higher here?
9
After clicking on the link to the source material, it pretty clearly says half of the increase is due to price. Still a lot, but somehow this reads like a CNN article "it's all price!" Rather than a more reasonable NYT article which would factually say "report says rise I health care costs as a percentage of GDP is half attributed to price.
1
America never truly allowed a democracy. The ruling class was always beset by greed and arranged a system that allows the greedy to exploit the humans and the environment shamelessly. Anything short of Martin Shkreli is par for the course. As long as the people don't revolt there is no problem. Add a vicious police and justice system and the level of greed and exploitation can be pushed further.
Seeing that we pay twice as much as the Europeans at a lower life expectancy just shows how much out line we are.
18
How indicative of a depraved society is it that one constantly sees advertisements to "use your (medical/dental) insurance before the end of the year". Drug companies tout their drugs in every medium, enticing gullible "patients" to pressure their physicians to prescribe these very expensive drugs for often imagined ailments. BILLIONS of dollars wasted that could have gone to infrastructure, feeding/housing the poor, education, etc.
Until people take medicine seriously and prioritize their needs (everyone should have medical insurance, and it must be paid for), fancy cell phones, cigarettes, sweet cereals, narcissistic cars, drugs and alcohol will trump (absolutely no pun intended) medical care. If the U.S. does not get real and create a NATIONAL insurance, covering ALL Americans, we are little better than a third-world country. The overwhelming attitude of entitlement without responsibility or involvement is appalling.
10
The AMA is a cartel of sorts. They are a powerful lobbying presence in Washington. They buy our elected officials. Economics 101 comes into play as in keep supply of doctors low and demand high and one can charge whatever they want. Publicly funded elections could curtail this cartel but this will not happen. We can thank Citizens united for that.
I get real tired of hearing about the high cost of medical school and the long grueling effort to become a doctor. Many other professions also require much training at a high price yet the compensation is not that of an American doctor. Lets do away with that weak argument.
My late husband was an M.D. Granted he went to medical school in the mid to late seventies. His student loan payment was $160 per month, with no parental help as both were deceased. It was paid off by 1992. With his income, it could have been paid of within the first year or two of his private practice.
Get big Pharma, the insurance lobbyist and the AMA out of
Washington politics and then we can aspire to universal health care with prices inline with other industrial countries. This will NOT happen in my lifetime.
18
True The health industry if not a monopoly has a strangle hold on health care. We are at the mercy of the too big to fail health industry because our government failed to create an affordable parallel public health care system managed by government as is done in a number of western countries to supplement the private health industry. Our government has essentially contracted private health care industry to provide health care at a non negotiable cost. In addition, significant number of our citizens are allowed by our government to cause self inflicted harm due to addiction to alcohol, tobacco, opiod drugs, lack of a balanced diet, preventable sexually transmitted diseases, legalization of marijuana for recreational purposes, free flow of drugs passed our porous borders, preventable cancers, injuries from wars and megacity crimes etc. Over the past 50 years our capitalist country has created an infinite demand for the supply of private health care on demand. The health industry stocks were among the best performing stocks last year and decades before that. One silver lining to all this is that we have the best health care infrastructure in the world and the best medical professionals in the world ready and able to serve our people although at a price. With every American convinced that affordable universal health care as the way forward we have to pay the price for it.
1
Several international surveys, over several years, have shown that the US cost for health care amounts to 20% or more of GNP. In contrast, most European countries spend between 9-14%. Yet, the quality of the US healthcare as measured by these surveys is surprisingly poor. Usually, US is ranked at about position 15 - that is, ON PAR WITH CUBA!
The infant mortality in the US is in comparison with most European countries staggeringly high, contrasting with the strict abortion laws in many US states...
Furthermore, life expectancy in the US has dropped during recent years...
It almost seems like the US health care system has applied Darwin's "survival of the fittest" principle on its own population!!!
3
He was of retirement age, but broke, having worked all of his life for cash, on gigs involving carpentry, painting, small engine work, so he had almost no credits in the social security/medicare system. He received around $500 a month, lived in an old camper and could not afford his meds for blood pressure and blood sugar.
And so his blood got bad, which affected his brain, and he couldn't arrange to take the bus to the clinic that provided free meds.
And then he fell dead in his old camper of supposedly a simple heart attack. And so it goes...
7
Negotiating drug prices alone would ratchet down costs. Then moving on to other prices relationship to costs would be more evident. Add to this a simpler billing provided by single payer which would resemble Germany's used of a card tap at the provider office. All the overhead for billing personnel would be reduced throughout the system. Current billing is a mess and hard to monitor for fraud.
4
The Upshot disappoints in focusing (in my opinion) on a tangential question: What causes us to spend so much on disease care without particularly good national outcomes?
The answer is the greed of “sellers” and the “gluttony” of “buyers”. Big surprise. And yes, many of the people involved won’t want to change.
But it isn’t good for us as a society to spend so much without Important benefits. And, by treating disease care as an optional expense, it leads to inadequate care for those without sufficient resources as well as bankruptcy.
The CRITICAL question is what disease care should the nation support to provide good OVERALL outcomes without gross waste.
Altering our current nonsystem in accord with the experiences of other nations with better outcomes is basic.
But, as in previous columns on this subject, the writers avoid that discussion.
Stephen Rinsler, MD
3
This is thought provoking, but woefully inadequate. Readers require much more information and empirical data to form any opinions. Simply blaming “higher prices” is not informative.
One of my doctors, replied when I asked if he could just call me instead of scheduling a separate office visit for a result, "What do you think, that I'm a lawyer?" We all know lawyers book by the quarter hour for a phone call. This doctor (no longer mine) is in it for the $$$$.
8
We have all the usual whining from the medical professionals
(1) Oh oh oh but medical school and college cost so much and then we have residency and make only moderate money as residents so we have to catch up...wah wah
* A PhD costs as much or more than medical school and the requisite post-doc positions pay terribly. A Phd in neurobiology is lucky to make high 5 figures
* A DMV also takes 4 years of college and 4 years of medical school and, in specialties like neurosurgery or cardiology etc, years of residency. My board-certified veterinary orthopedic surgeon does NOT make the $400,000 -500,000 of the MD board-certified orthopedic surgeon - and he has every bit as much training and has to know the physiology of several species, not just one. The vet orthopedic surgeon might make $75,000 -100,000 max (and oh yeah had the same student loans)
* But but but lawyers make even more.....wail of its not fair
Well they do not. Less 10% of lawyers make 6 figures - forget the $200,000 - 500,000 of MDs in specialties. Typical lawyer in the average practice - nationally - maybe does $65000- 75,000 in a good year.
Quit 'cher whining
PS: And my vets can give me estimates and an echocardiogram done by the board-certified veterinary cardiologist was $350 - not $3500
As to liability? A vet who really messes up on a $3,000,000 racehorse or $25,000 Service Dog is in a world of expensive trouble
10
Direct Primary Care decreases costs and increases value as long as there is a reasonable subscription signup for these outpatient services.
It seems that the $750 I was charged for 4 stitches in a finger was a bit steep.
5
We have paid very dearly to protect ourselves from the threat of “socialized medicine “. I have observed the rate of inflation for health care to exceed the CPI every year since 1967.
President Obama was unable, with Democrats controlling both houses, to get any significant cost containment into the AFC.
We have been and continue to be hoisted upon our own petards.
5
The extraction of excess profits from people who are too sick or in too much pain to protest is immoral. I don't understand why politicians can't state this and regulate healthcare pricing better.
4
The prices is just a simplistic non answer. Sure the prices are high. Because they have to figure in the 20% profit for the insurance companies and all their workers whose job it is to keep the insurance companies from paying out anything. And of course this has nothing to with real care..... Medicare for all ... Medicare for all .... Medicare for all ..........................
6
Ok, "it's the prices stupid", but why are the prices stupid high?
Because healthcare in the US is a for profit industry. period.
1 new example, that use a gene therapy to fix illness. There is a shot that "cures" blindness (some types) . The cost - 1 million dollars for the shot... really. So people who have a lifetime maximum of a mill healthcare policy, use their entire allotment in a single shot... The VC (Vulture Capitalists) that purchased the rights to the technology during the testing phase believe they deserve a % of what a sighted person will earn over a lifetime.... Indentured Servitude anyone?
4
What's wrong with US healthcare? Pretty much what's wrong with every other malaise afflicting the country from gun control and justice & corrections through to foreign policy and the environment - a doctrinaire approach to everything, especially by the Republican Party.
The urge to differentiate the country from pretty much anywhere else on earth and the rejection of ideas from other countries seemingly trumps reason at every turn.
Is it disastrous? Will it result in the country imploding? Will the US fail (and fall) spectacularly?
Absolutely not! But lessons are learnt by those viewing from a safe distance, while US citizens and residents suffer as guinea pigs.
6
I think that US does an awful job for consumer protection in case of anything medical. There has to be some sanity in prices, particularly for auxiliary stuff, and there has to be some sanity in the price differential a provider can charge different patients.
Somehow, US managed to successfully fight the "1000-dollar-a-minute" phone call frauds, but it is as if it is completely at a loss with what to do with "1000-dollar-an-aspirin-pill" bills.
5
As a physician, I see the problem as one of consumer choice. I have had many a patient come to me asking for expensive tests, such as imaging and blood. When I carefully take my time to explain why these are not necessary (rare is the time when they are), they never come back. If I just order the test, even spending less time with the patient, they LOVE it and I've got a patient for life. I would rather be paid for my time and care than ordering tests!
6
I disagree with the premise that "people in the United States typically use about the same amount of health care as people in other wealthy countries do". If you look at the frequency of coronary stenting (PCI) in the US, it is a factor of 3-6 times that of the rest of the world. Yet, the mortality results are similar, if not better in other countries, even accounting for genetic differences (Stockholm vs. St. Paul study). What is even more astonishing is that studies such as COURAGE show that there were no mortality differences in treatment with or without stenting! A recent article in the NYT showed that their was no difference in angina relief either. In our area, stenting can cost $40,000 and more. There are 1,000,000 stents performed annually in the USA! THAT'S THE REAL ISSUE.
3
The aggregate supply curve for health care in the US is inverse. Unlike corn or soybeans increasing supply does not reduce cost. Therefore, increasing competition increases total cost. Regulation is required to match supply to requirements.
The free market does not work for health care in the US. 33/34 developed economies recognize this.
10
Healthcare run by insurance companies is often a form of ransom. The biggest thing pushing costs is an industry devoted to profits over people. Like most industries, it serves the investors, not the customers.
7
The reason why our healthcare costs are higher than other countries in Europe and Asia,is because our healthcare market is not regulated enough like the way Trump and Republicans in congress claim to be.
And the most people who'll object, if our federal government follow Maryland's system of "one payer system to combat high health care prices" as mentioned here, where the "insurance companies and public programs pay the same amount" will be the "physicians,hospitals,pharmaceutical companies and pretty much every other provider of health care in the United States."
So after analyzing all the reasons why our healthcare costs are almost twice or triple of the costs borne by the major industrial powers,we've to conclude as the citizens of this country that we cannot allow this system to continue anymore.
We the patients who're the real payers of our healthcare costs not our government have to put our foot down to this malpractices that are going on for generations where our healthcare providers are ripping off our govt. who in turn is not being able to spend as much on our well being and on our children's health and education.
With the billions or more than a trillion dollars that our govt. is doling out to our hospitals and all the major pharmaceutical companies, it can hire hundreds of employees in all the federal govt. offices instead of using attrition to reduce the number of federal govt. employees, especially in our state department and also in all the V.A. Hospitals.
2
Here's an example of what is wrong with America's healthcare.
Last March, I had an outpatient GYN procedure.
The surgical center charge for the 20 minute procedure was $11,900.
I have insurance, and the "allowable" charge for the procedure was reduced to $1137.
A $10,763 difference.
I paid my deductible & 10% of the remaining amount, a total of $518.
If I didn't have insurance, I would have had to pay the entire amount. Why was the charge so high in the first place? If the facility makes money at the $1137 charge, why was $11,900 billed? To make 10 times more profit?
And this was just 1 of 5 bills, there was also the doctor's bill, the anesthesiologist, the pre-op exam and labwork.
Each one was billed at a higher rate and adjusted to "allowable" amounts.
If costs are covered at "allowable" amounts, why are such higher amounts billed? The whole thing just seems like a scam.
Singlepayer would fix this.
33
Because different insurance companies reimburse different amounts. If you set your billing charge too low, there's a chance you won't get the full amount paid by a good insurer, so the billed amount is always set artificially very high to make sure that never happens.
1
My daughter required a test in her nine year bout with severe pain. A test well established, accepted by virtually every insurance provider.
Every insurance provider except Anthem, apparently.
We were finally on the cusp of a diagnosis, and this $7,900 test was all that remained for confirmation. We needed it.
Anthem said no.
Experimental, they said, despite its being universally accepted for adults and with a decade-long record of acceptance for adolescents.
My Internationally Famous medical center knew the story, and found a work-around. The hospital charged me what they would charge the insurance company.
The $7,900 test was billed to me for less than $500.
That is, my big time super-famous, paragon of the industry insurance company reports charges over 1500% greater than they actually pay.
There's plenty wrong with the US model of corporate medicine.
But if you're discussing money, start with the criminal enterprise that is health insurance.
A trillion dollar industry that contributes literally nothing to the economy or quality of life in America, solely dedicated to denying service to its customers, to complicating the inherently simple task of providing care, to corrupting government and creating social anxiety.
It's insanity that even a single legislator supports these gangsters, yet they all do. Because they wear nice suits to testify, I suppose, and pay handsomely.
20
The word "insurance" appears no where in the article. Now that I'm retired and required to have a Medicare Part D plan, I pay $500 a year for the right to pay a higher price for medication than with no plan. That is one small example of why health care is so expensive.
13
In what way are you required to have Part D? I am retired and do not have it.
1
do outcomes for patients justify the much higher prices? the question wasn't much explored here, but many studies indicate that overall, the US system isn't providing significantly better outcomes than healthcare systems of our peer nations. "some innovation" doesnt justify the price differential either; any number of innovations are built on research that was funded at least in through NIH and other federal grants, meaning taxpayers have provided a share of support for medical innovations. in a more rational system, benefits would be available more broadly than in the US. we need a deeper look at where all that extra money goes and why current leaders of our government are so adament in opposition to universal healthcare.
10
Some data for Maggie:
All other industrialized countries have some form of universal government run health care, mostly single payor. They get at least as good care as measured by all 16 of the bottom line public health statistics, and they do it at 40% of the cost per person on average. If our system were as efficient, we would save over $1.5 TRILLION each year.
www.pnhp.org & www.oecd.org, especially
http://stats.oecd.org/Index.aspx?DataSetCode=SHA
Here are the per capita figures for health care costs in 2016 in PPP dollars (which take cost of living into consideration) from the OECD:
US - 9 892.3
UK - 4 192.5
France - 4 600.4
Australia (similar obesity) - 4 708.1
Germany - 5 550.6
Denmark - 5 199.3
The Netherlands - 5 385.4
Canada - 4 643.7
Israel - 2 775.7
Switzerland (Highly regulated private insurance) - 7 919.0
Let's compare some bottom line statistics between the US and the UK which has real socialized medicine.
Life expectancy at birth:
UK - 81.1
US - 78.8
Infant Mortality (Deaths per 1,000):
UK - 3.8
US - 6.0
Maternal Mortality (WHO):
UK - 9
US - 14
The WHO using a formula developed by The Harvard School of Public Health ranks our system as 38th in the world. (France & Italy are 1 & 2). This formula doesn't include costs. Bloomberg ranked countries' systems on efficiency which does include costs. We came out as 50th out of 55.
As Einstein said,
"The difference between genius and stupidity is that genius has its limits."
5
Nothe outcomes are not justified. Our life expectancy is 31st in the world. Guess who is better. Almost every country in Europe with half the medical cost as a % of GDP.
Furthermore in Europe EVERY CITIZEN is insured so they have a healthies workforce as well as longer life expectancy.
5
Plain and simple, the reason for high prices is capitalism, the opportunity to make a profit off offering a service with the payer not being the receiver, but an independent, vaguely anonymous entity without investment in the amount paid for each service.
Single payer is not going to solve the problem. The current system isn't going to reform.
7
"A single-payer system could also regulate prices. If attempted nationally, or even in a state, either of these would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies — and pretty much every other provider of health care in the United States."
Those are pretty powerful interest groups not to mention insurance companies and lawyers that benefit for the correct system.
Some tweaking can happen but going to anything like a Canadian system which seems to me superior and more cost effective is too much to expect.
5
Factors that do not get addressed in this article are the facts that doctors, hospitals, and other heath care providers often go unpaid due to insurance claim denials, and the cumbersome regulations set up by both the government and the insurance companies alike. It would not be unusual for a governmental regulation require that medical practitioners spend hours doing unnecessary paper work and then complain that they were not spending enough face to face tie with their patients. The fact that medical offices have to pay for numerous clerical workers to fill out insurance forms (each form often different for a specific insurance company), often spending as much time attempting to recoup money from these insurance companies when claims get denied. The fact that that doctors and other medical providers are required to be experts in Insurance and governmental regulations, as well as their chosen area of practice drives up costs. Expensive computer systems, medical billing systems and other unpaid costs taken on by providers and hospitals also drive up costs as well.
10
Single payer would be a big step in fixing those problems.
But also, specialists earn a lot more in the US than in other countries.
There are also studies showing that hospitals are buying up local practices and the rates they charge to insurance companies are going up because they have a monopoly.
A NPR segment showed a case in California where the price of a OB delivery nearly doubled but the OB doctors were still getting the same as before the monopoly.
13
Independent
There is no doubt the great soulless evil, to use that term appropriately for once, that lies at the heart of American healthcare is the health insurance industry.
However, your comment edges perilously close to painting US doctors as victims in this bloody corporate blitzkrieg.
They're the ones who opened the door.
In a search for easier and bigger paydays, and foolishly confident of their professional standing, they bargained away their position, their standards, their reputations, and precious professional autonomy.
They laid down and made themselves just another powerless group of employees to the corporations that swept in and overcame them in a heartbeat.
Now, just because doctors were greedy and foolish, that didn't mean our health care system had to become a cruel profit machine. I'm sure they would prefer it wasn't. I hope so.
But as bad as health insurance and corporate healthcare are (and they are epically bad) it behooves us to remember it's the docs who brought us here.
1
A lot of people claim that the free market and more competition is the solution.
But we have been trying that for 50 years.
The other countries are half the cost with the same quality.
All some form of government intervention.
When will we wake up?
18
In a free market the price of the service is known by the buyer who can then shop around for the best service and price. There is no transparency in the pricing with our medical system!! Simply requiring the pricing to be published and available to the public would help patients shop around and would allow the "free market" to work.
Prices have to come down or only the rich will be able to afford health care. The very poor are covered by Medicaid so that leaves the rest of us in the middle income uncovered.
3
There is no free market - at all - for two reasons: the access to the US healthcare market is strictly regulated by the FDA - intentionally keeping it protected from cheaper alternatives for established techniques, medications and treatment options. The second limitation is that the market is not transparent to the patient - at all - and that the patient has little incentive to shop around for cheaper alternatives. Even if you would try to figure out how much hospitals in your area would charge you for a certain procedure or treatment....you would fail. Nobody would be giving you any real numbers!
3
Thank you for this informative piece.
There is little doubt that Americans pay more for health care than citizens of other advanced countries. I would like to see the breakdown: how much of the premium pricing goes to physicians, hospital administrators, testing facilities, and of course, our insurers?
Lets compare each of these cost components to those in Canada and advanced European nations!
11
A few year ago, I saw a meta study published in Scientific American comparing health care quality of the US and Canada.
The study showed that the results were essentially the same.
The US did a few percentage points better in some areas and Canada did a few percentage points better in other areas.
So we are paying more. We just aren't getting more.
13
This is a very superficial treatment of a complex topic. Physician salaries and hospital reimbursements have declined relative to inflation. Medicare and medicaid fees have not kept up with inflation in decades. Most doctors are working harder and longer for less. The overwhelming burden of government rules and insurance company bureaucracy has made bill collection a nightmare. Meanwhile, the executives at insurance companies are earning hundreds of millions of dollars.
The cost of fighting with insurers, paying for defensive medicine (U.S. malpractice insurance is the most expensive in the world), and keeping up with the demands of technology (e.g. EMR) are consuming most health care providers. Too bad the authors didn't interview anyone actually in the trenches.
9
I saw a study that showed defensive medicine added about 1.7% to costs.
Actual malpractice insurance costs added another 0.8%.
5
I saw a study that showed defensive medicine added about 22% to costs.
Agree. My husband's grandfather was a physician. What he made in the 70's and 80's was far more than what my husband makes now as a physician, if you adjust for inflation. Same medical specialty and geographic area of practice. The cost of doing business as a physician has gone up considerably while reimbursement has declined or stayed flat. Maybe some physicians are making more money than ever, but it is not from direct clinical practice that I have seen. The physicians we know who make the big bucks have ownership in urgent cares, sell wellness products/supplements, or perform lots of cosmetic procedures.
1
Mandating publicity on pricing information by healthcare providers would be a big step toward rationality. It would be fairly easy for the US Gov't to impose a requirement that all providers post their prices both online and in print. Bringing a little actual competition to the game might have some meaningful results.
4
“For example, one study found that the spending growth for treating patients between 2003 and 2007 is almost entirely because of a growth in prices, with little contribution from growth in the quantity of treatment services provided. Another study found that U.S. hospital prices are 60 percent higher than those in Europe. Other studies also point to prices as a major factor in American health care spending growth.”
Followed by this rather vapid concession to the status quo: “Higher prices aren’t all bad for consumers.”
A typical in-patient stay in a hospital is about 5 days, and that may cost you over $10,000.This figure does not include major procedures, ambulance fees, or other charges.
Only in America!
8
And what a joke to call most hospitals "non-profit".
They are more and more being taken over by what I call HHCs - Hospital Holding Companies. Here in the Mid-Atlantic, Sentara is buying up hospitals, urgent care facilities, and out patient clinics.
3
Not mentioned in this article was the cost of practicing defensive medicine. Maybe more expensive testing is ordered because of the fear of litigation? Another issue, perhaps not quantifiable, is patient demand for expensive testing?
2
I saw a study saying defensive medicine added about 1.7% to costs.
Actual malpractice added another 0.8%.
3
The US spends almost 18 percent of GDP on health care. Canada spends 11 percent. The difference, mainly, is the insurance companies between the patient and the doctor or the hospital. And because of the lobbying power of insurance companies, there is little chance for change.
16
And people in the US get differing quality of care depending on their insurance and financial status and geographic location.
Rural people are left out entirely. They may have one doctor and no hospital for miles.
People with no insurance don't go to the hospital until they are critically ill. Often these people are seen by less qualified staff.
The Paul Ryans and the Mitch McConnels get excellent medical care at no expense to them. So do they really care about others.
17
In nations with universal coverage prices do not include a markup to cover the large number of patients who are uninsured and unable to pay that we have in the U.S. Furthermore, Medicare and particularly Medicaid pay less than the cost of providing the services and therefore this shortfall is also included in the markup. For commercial insurers prices are irrelevant since they all negotiate their rates with hospitals. Still, there are major underlying cost issues.
The biggest opportunity that neither the liberals or conservatives consider is to move away from a fee for service system under which sick people provide revenue to providers to a capitated reimbursement system under which payers and providers benefit from a healthier population needing fewer services.
6
Kind of interesting:
Since 1996 we have seen a greater amount of "care" given by APNs and PAs. The several times I have gone to the ER I have seen a PA. Often I see a PA when I go to see the doctor. And sometimes it isn't even a PA, but an MA.
I would think these people would get paid less, and in some cases a lot less. Even in hospitals one is more likely to see a NA than an RN. (APN: advanced practice RN, PA: physician assistant, MA: medical assistant; NA; nursing assistant.)
7
The root cause of high prices is the mandate of employer based insurance. The sooner people realize it , the better.
http://www.healthpolicy101.com/2016/01/why-are-health-care-costs-in-us-o...
2
Then why do all the other countries spend about half as much as we do and they have universal coverage?
Doesn't make sense.
5
jimmy
You need to get out more.
Employer based health insurance was purely a creation of...employers.
It was created as a marketing tool, to attract and keep employees. Later, it became a PR tool, allowing companies to point out how very much they cared for their employees.
The practice stood for a century when some wise executive decided that, like voting on Supreme Court nominees, it was no longer necessary.
It was at that moment, with companies threatening to unilaterally yank the insurance they had trained people to count on, that mandates entered the picture.
By "price" I think you mean "insurance companies"? Since America has multiple insurance companies in each market vying to cover your health care (and deny your claims), with the attendant marketing administrative costs...while other western democracies have single payer, with much lower non-health care related costs. Now why was that so hard to write?
8
As this article describes, US healthcare is more expensive... and prices explain that reality, not greater or less efficient consumption of healthcare goods or services. But that's the first-order effect and it is descriptive, not prescriptive. The prescriptions deduced in the article and in the comments here are not necessarily correct: greater government regulation or intervention as a player in healthcare markets is unlikely to help with the pricing issue. The only mechanisms to have been proven to increase efficiency and innovation are free markets. That's not a popular observation at Oberlin, Berkeley or Cambridge (at least not in the social "sciences" or sociology departments that have never seen a problem that wasn't the result of white heterosexual American men and that couldn't be cured by big government intervention and more taxes on corporations). Still, the reality is that taking third-party payers out of the system for most healthcare transactions (except catastrophic) and taking pretax insurance away from the privledged - if it's a benefit, tax it - would cure the high-prices problem - and I mean overnight.
Who fed and clothed more people, Karl Marx or Sam Walton? Let's let free markets (within regulatory parameters and with safety nets) have a shot at healthcare!
1
On the last point I think the beg to differ. Karl Marx and the social revolution his movement and other socialist movement brought food and clothing to millions who were just condemned to live in rags and go hungry. Sam Walton, the biggest importer from China, destroyed more American jobs than anyone. He put people back in rags and took food from their tables, our tables.
5
"Higher prices aren’t all bad for consumers. They probably lead to some increased innovation, which confers benefits to patients globally."
In other words, the higher prices are just a tax we pay to help give the world better healthcare. This is essentially the same approach as saying that the US should use a lot of renewable energy because that will help the whole planet.
In short, the idea of paying more should be strongly embraced by the NYTimes and the mainstream liberal establishment.
1
"They probably lead to some increased innovation, which confers benefits to patients globally."
And they lead to a gutting out of other countries' medical workers, attracted by the higher salaries in the U.S. It's amazing to me, that even here, the U.S. portrays itself as a victim, supporting "innovation" against all those free-loaders in the rest of the world.
6
Back in 1988, Canada started its first study on how to finance healthcare in the 21st century when aging problems rose in importance.
One conclusion was that the "single payor" system was about 15% more efficient due to a much lower need for medical staffs to enumerate a litany of small billable items.
If anything, the relative costs of American medical care compared to the rest of the world have increased; while at the same time mortality and morbidity in the USA have worsened relative to every other advanced economy.
Objectively worse mortality and morbidity results for more money is not a measure of "success" even if about the "same level" of medical care is provided as in other advanced economies.
7
Okay, higher salaries attract the best researchers and physicians, with facilities like Mayo Clinic and John Hopkins at the worldwide top. Only a small sliver of the population can afford treatment in these places though, yet the whole population pays more, even in mediocre hospitals. Medical breakthroughs are happening everywhere, and find their way to hospitals worldwide anyway. There is just no good argument for doctors making a multifold of e.g. engineers.
3
In my husband's office, it's not unusual for him to have to have his nursing staff spend a very excessive amount of time trying to secure authorization of much-needed care for patients. Once, a nurse devoted no less than 10 hours getting a brain MRI for a patient, and when things like that happen regularly, it greatly reduces the profit margin in a medical practice. Insurance companies come up with one time-wasting thing after another to burden physician offices and patients to the point that people are tempted to give up. When trying to access authorizations, highly qualified nurses talk to low-level insurance employees who really do not understand what they are being asked to authorize - and sometimes the insurance employees are not in the U.S. And the nursing staff has to fax requests for authorizations sometimes three times because they get "lost." It would be great for the NYT to do an article on the cost to the system and to patient care of insurance subterfuge.
26
An ounce if prevention us worth a pound of cure.
We need government funded wellness centers in every community where people can learn about meditation and other means of stress reduction, proper nutrition, and exercise.
We need a true universal single-payer plan. The Democrats ought to make the creation of such a system a positive political goal.
The United States is US. We get the government we deserve.
6
In most other nations doctors are important professionals. In the US they have become entitled demigods. It is past time to seriously consider a single payer system.
11
Having moved from the US to Germany and having access to their healthcare delivery system in my opinion and experience, its better, its not complicated , more choice, include dental and a whole lot less expensive and everyone is insured. I have to contain my emotions and rage when I read articles about care in the USA.
To my fellow Americans you get what you vote for! Keep voting for the Paul Ryans and Mitch McConnell's and you will see how much worse it gets.
30
I learned nothing from this. Why are the prices highers? What impact does the cost of medical school have? Why do other countries succeed at lower cost? What role does the "free market" play in all this?
17
Where I live, our major university medical center makes no secret that it is a revenue source for the university itself. Little by little the States have reduced funding for their universities and seek revenue wherever they can.
2
Do readers know that at most hospitals you can ask the finance dept for a discount if you pay for a procedure upfront? Sometimes it is quite substantial.
1
Really? Then why are "cash" patients charged the highest rates by far? More yet, why aren't rates for services/procedures posted or available to the public? The reason is NO ONE could stomach them. Prices are multi-tiered and widely different, sometimes exponentially. Healthcare is the only "business" I know of that charges an excessive premium for paying cash. What you're saying is they will sometimes discount the "ripoff" by paying in advance. What I'm saying is the "pricing scheme" would probably be criminal in the sale of anything else.
9
The fact that the cost of hospital care is 60% higher in the US than in Europe is scandalous but not surprising.
I recall a comparison between two hospitals, each with an equal number of beds. One was in Boston, the other in Vancouver, Canada. While in Vancouver, the billing department required a single office with a small staff, given that , except for foreign visitors, their patients are covered by the same single payer, the Boston hospital required a separate building for the staff of insurance policy experts, accountants, lawyers, etc...to handle the myriad of different insurance policies covering their patients. Certainly the accountants and lawyers added no value to the care of the patients, yet they were absolutely necessary for the hospital to operate in the environment, yet at a very high cost, as such expertise does not come cheap.
31
And, in the US hospitals need to use very expensive and frequent legal service to defend spurious lawsuits. In Canada and other countries malpractice lawsuits are a fraction of those in the US.
2
Yesterday I had problems and went to my local clinic emergency department. I was seen in 20 minutes and referred to the general hospital. On arrival at the general, I was triaged within 30 minutes, and ended up spending the day under observation and given all sorts of tests and medications.
My cost for all this was zero, because I was fortunate enough to have emigrated from one country with a single payer system - the UK (NHS) to another (Mexico, the IMSS)
17
It's because U.S. has an army of healthcare lobbyists armed with money, and a Congress with members who spend great deal of their energy doing fundraising for their re-election campaign.
A good first step to address high healthcare cost therefore it's to have publicly funded elections.
23
"Why the U.S. Spends So Much More Than Other Nations on Health Care"
The answer, as nearly all of the poor and the middle-class know, and which the 1%ters seek to hide, is very simple; its because corporate America, the same corporate America which owns our government, in its entirety, in particular Big Insurance, Big Pharma, Hospitals, including all ancillary corporate entities, together make it so, and intend to keep it so, because unsurprisingly they don't see that reasonable healthcare expenses increase their wealth, nor do they see that reasonable healthcare expense should be considered a part of their business plan, unsurprisingly ...
Their existence is all about wealthcare, their own wealthcare.
For a moment, especially after reading the last paragraph, I wondered at the presumtuousnes of the authors ...
30
Another study found that U.S. hospital prices are 60 percent higher than those in Europe.
!!!!
And why isn't the cost of pharmaceuticals, which, thanks to Republicans, can't be negotiated, part of this discussion.
21
The first problem that nobody ever talks about is that no one knows how much the product they are buying costs. Quick, how much to have a baby at the local hospital? How much does it cost to have a routine colonoscopy? How much does it cost to set your little football players broken wrist?
The vast number of consumers have no idea. People don't buy cars that way. They don't buy houses that way. They get prices and see if they can afford it.
In the healthcare industry they tell you after the fact how much of the treatment was covered by insurance and how much is out of pocket. Oh, and the same procedure has a different cost depending on your insurance company, or if you are uninsured.
It is easy to find the estimated cost for non-insured cosmetic procedures like breast implants, or lasik surgery. But if the insurance industry is involved, well, the numbers are very grey.
29
The first mistake is to consider health care an industry. Health care is a human right. A country that does not provide the right to health care to its citizens shows that it’s government has no regard for its citizens, and when it claims to be a democracy, demonstrates its citizens have no regard for one another.
26
Yes! Even a restaurant has a menu...with prices
If we reduced our spending on health, jobs and profits would disappear or shrink. Since we have no societal commitment to helping those whose industries shrink, but rather leave them to face the problems on their own, how they choose to face these problems is to preserve their jobs and profits in any way they can. These ways include lying, sabotage, scare tactics, cries of communism, and deliberately making the shrinking as painful and harmful as possible so that the shrinking will be reversed. The tactics of the tobacco industry when it started to shrink are emulated.
When there is no safety net or effective help in moving to new jobs or industries, people and organizations do what they must to survive.
4
What about the cost insurance companies impose on the system? Included are salaries of company executive, managers sales staff, office staff and shareholders and let's not forget office space. Billions of cost. All this from a sector of the healtcare industry which does nothing to add to the patient's actual care. A single payer system would eliminate most of these expenses.
24
The cost of administration in general (hospitals, health systems, insurance) has far outpaced much of the rest of the growth in healthcare.
6
On a visit to your country, I contracted food poisoning and had to visit the ER. Fortunately, I had traveller's insurance and OHIP (Ontario government insurance) so I had no out-of-pocket expenses.
My insurance company sent me a copy of the bill for information purposes, and when I saw the cost I nearly had a stroke.
A three hour visit was billed at nearly $2,000. I particularly remember that the cost of an IV was $600.
Contrast this with my Canadian experience. I recently spent 6 days in hospital due to a massive infection. I had an MRI, chest X-rays, cardio tests, a colonoscopy, antibiotics and at-home care. Due to the evils of the single payer system, my only cost was the cab ride home. My co-pay for 2 weeks worth of home delivered antibiotics was $4.00.
For those who would say that I don't know the total cost of all of this, I admit this is true. However, I have seen an invoice from a previous overnight stay. I can't recall all the details, but one does stick in my mind
That was the cost of an IV in a Canadian hospital. It was $60.
33
Cherish your health care. I married a Canadian (from Toronto) and he, too was STUNNED at all the paperwork he had to fill out, and the costs. He said his OHIP card had all this medical history and all any physician's office in T.O. had to do was run the card through a (credit card type machine) and that was it. He said U.S. health care was (all-fouled) up and he missed his OHIP coverage. Glad you're better! :-)
19
'If attempted nationally, or even in a state, either of these would be met with resistance from all those who directly benefit from high prices, including physicians ...
Higher prices aren’t all bad for consumers. They probably lead to some increased innovation, which confers benefits to patients globally. Though it’s reasonable to push back on high health care prices, there may be a limit to how far we should.'
spoken like a good doctor wood.
2
What's that? Anyone else hear all those physicians, dentists, and Big Pharma "researchers" (task masters) and CEOs (thieves) whining about all their hard work, their long hours, their miserable rich lives?
'Tis rather sick. Pun intended.
3
I just had a baby, my second. I spent one night recovering in a shared room at a well known university hospital - Lucile Packard Children’s Hospital. Let me just say sharing a room after giving birth is less than ideal, but the hospital was full. The new parents next to us, kept the lights on until midnight because they could not sooth their new baby. They called the nurse into the room at 4:30am because the baby spit-up? So let’s just say, it was less than restful. I am not even going to start about sharing a toilet with another bleeding postpartum woman. Guess how much they charged for this amazing one night? $39,000!!!!!!!! My insurance negotiated a different rate but really $39,000 for one night in a shared room where I had to wipe blood off the toilet not knowing if it was my own. So yes, “it’s the prices stupid.”
36
This demonstrates the lack of transparency needed to permit market forces to drive down costs.
If the consumer was in charge of payment, the consumer would be able to insist on specification of exact charges in advance and shop around. This is especially true for childbirth, when the need for services is known by the consumer months in advance.
Blaming greed is silly. Television manufacturers are just as greedy as other capitalists, but prices keep coming down because of competition.
Imagine if you could go to the internet and shop for hospital care just as one shops for a television. One could see online reviews by consumers and comments by doctors.
Insurance messes this up because the prices are concealed. The list price is somethings and seems simply insane.
There is much more about health care price in the series "Paying Til It hurts" by Elisabeth Rosenthal.
http://www.nytimes.com/interactive/2014/health/paying-till-it-hurts.html...
4
Must read "An American Sickness" by Dr. Rosenthal
2
It’s our bought-and-paid-for Congress, Stupid!
9
Think upon 2 things republicans banned...negotiating the price of pharmaceuticals except for the VA I believe and researching gun deaths. Guess trump banning certain words in medicine is just following the grand ole republican tradition. Rice is nice but ignorance is better.
1
It's amazing how the authors pull their punches at the end.
Why don't we call a spade a spade? It's just corporate greed, unrestrained with any regulation or human decency. Why do we pay astronomical prices for scripts? Because it's illegal to get them filled in Canada. Why is that? Because of collusion between lobbyists and govt officials, hypocritically claiming to protect us. I know a certain person - VERY well - who just sends his scripts to Canada, and hasn't gotten busted yet. I don't think they have time to go after individuals who do that.
I'm not impressed by the drs who comment that they aren't the ones getting the money. Obviously they make vastly more than their average patient.
But as many have pointed out, the most obscene and ludicrous part of the system is the insurance companies, who just suck us dry and contribute nothing. A huge thick layer of useless scum ...well !
19
Because of collusion between lobbyists and govt officials,
Actually, it's lobbyists and Republicans. A few years ago, During Bush II, I think, the REPUBLICAN congress voted to make it illegal for Medicare or Medicaid to negotiate drug prices and for individuals to get their drugs out of the country.
19
The impossible greed of trump's America leaves the poor to writhe in agony. Bernie would deliver us from evil and pain!
6
A hearty and healthy thumbs-up!
1
You need to calm down.
Guess you missed the whole NYT series called "Paying Until It Hurt" about $100,000+ bills from a doctor who never met the patient and tests that were 5 times what they cost in other countries
An oh yeah - that was written when it was all happening under Saint Obama!!
I wonder what the death rate from preventable medical error is in these other comparable countries. In the USA such deaths are the third leading cause of death nationwide. The costs of such medical error, which includes approximately 10,000 non fatal injuries DAILY, are authoritatively estimated to be one Trillion dollars annually.
Since this article is written by physicians I can see why they would completely ignore the factor of deadly medical error.
4
Any role for insurance companies in high cost of care?
None you would find in this article.
4
This still doesn't address the REAL issue:
All those other countries have NOT-FOR-PROFIT healthcare.
The US has a FOR-PROFIT health INDUSTRY: Shareholders get rich on keeping people sick.
What is the incentive to prevent and cure illness when the rich get richer by making it worse? :O
15
That is not quite true.
For example, in Germany, medical practices and many hospitals are "for profit", even some insurance companies are "for profit", though the vast majority of Germans are insured in one of about 200 semi-public insurance entities.
2
We pay more for health care because our politics are subservient to money. It's the very same reason we got the tax bill from the GOP Congress.
The U.S. is not the beacon of democracy for the world. We're stuck half way between the best European countries and Latin America. I don't think I exaggerate. And it's because of inequality and the Supreme Court's love of money in politics. Ask Roberts.
8
Americans believe that someone should get rich off the sick and dying. In fact, we treat them in ways that are most profitable rather than most likely to cure them.
7
Any analysis that doesn't take into account the effect of the health insurance industry and the back office overheard borne by every doctor's office to interface with that system is inadequate no matter how many Ivy League PhDs are involved in the study. A pie chart of where our 3.3trillion a year goes should be a starting point. BTW most prosperous countries don't even allow the kind of drug marketing we have here.
9
"Measured by how much we spend, we’ve actually gotten a bit healthier", you say.
Which is both crazy and, pardon me, stupid.
It's also the very definition of the problem you write about here.
It's striking, even in an article all about money, that there is no mention about the quality of care or the statistics on health outcomes, both of which are vastly substandard in American medicine.
What does the amount we spend on care have to do with anything when prices rise at the whim of avaricious or corrupt executives, with the support of a money-blind congress, and with no relation to market conditions?
Just because I'm paying $600 today for an EpiPen that cost me $40 dollars yesterday doesn't mean I am healthier. It means my health care system is sicker. Much sicker.
16
In Sweden, the nationalised health care system pays less than 200 dollars for the Epipen drug kit. The cost for the patient is even lower - and not entirely free.
The US health care providers seem to be lousy price negotiators. Or?
1
Is this supposed to be some kind of Eureka! moment?
A stunning insight?
No kidding the prices are high. We live in a capitalistic society where every internist expects to be a millionaire by the age of 55, and that's after paying for his/her children's education. And the drug companies all want to make 15%+. And all of the in-betweeners want to make...
3
What happened 20 years ago is that shrewd businessmen (and woman) saw that they could make enormous profits off of the sicknesses of the American public. Non-profit insurance companies became profit machines for these business glutens. Pharmaceutical companies were allowed to rape and pillage. Medical manufacturers went nuts charging what the market could bear, without any oversight by the government. Lobbying at it's "best".
Physicians lost control of their profession, forced to sign contracts with HMO thieves. Patients were denied claims randomly, as John Grisham keenly predicted in "The Rainmaker".
As a physician, I can now barely depend on Medicare to reasonably pay me for my services. Forget about the insurance companies with their ridiculous deductibles that they are allowed by the government to demand.
The U.S. spends so much more on Medical care because greedy corporate America has found their Golden Goose for profit. At the expense of sick people.
18
See if you can move to Canada. Many provinces..probably all...are actively recruiting docs. BC is. You would need to start in a rural area if you are a family doc but after a few years you can move to an urban area. Gun violence is rare and we are multicultural. Immigrants can apply for citizenship much quicker than in the USA.
1
Just another (albeit a big) part of the racketeering economy, run by oligopolies, tax "professionals", lawyers, unions (see the Times on NYC subway cost overrruns), (over)regulators, big corporations and all the other special interests that have strangled economic growth and kept half the population without a real pay increase since the 1960s, while feathering their own nests very nicely.
But as long as voters are ok with trudging on like mules nothing will change - which suits the wealthy down to the ground.
4
We know that the system is a mess. Many reasons.
1. Liability- I saw 30 patients today. 7 of them involved in lawsuits because somebody has to pay!
2. Patients demand everything since it costs that so little, particularly with medicare and coinsurance.
3. Lawyers and bankers make huge salaries and now get preferential tax treatment.... why shouldn't I, who saves lives, make a comparable income?
4. The government unbalances the market by forcing medicaid to pay market costs for everything, artificially setting very high prices.
5. We have loads of people on the gravy train, people working less than they are capable of doing (many by choice), illegals consuming healthcare, people working off the books and not paying into the system.
This cannot be changed in a vacuum. We need sweeping changes- starting with telling people "work harder," stop smoking or don't get healthcare, diet or get nothing, stop having kids we cannot afford, get rid of the illegals and tell people in the ER that unless they are going to die from sudden (not chronic) illness to leave if they do not have insurance.
The problem with the ACA is that it attempted grand scale social change in isolation, without addressing all of the factors that contribute to the problem.
6
If you saw 30 patients today, that is on you. One can not see that many patients in one day and do them justice IMHO. Why did you see 30 patients in one day? What was the office visit rate for each patient? Perhaps the high number of patients seen per day is for financial reasons?
2
Lawyers make huge salaries .... why shouldn't I, who saves lives, make a comparable income?
Gee sure I'm good with you making what the median lawyer in the US makes -- around $65,000 - 70,000
Yep - those divorce lawyers and small time criminal lawyers handling DUIs sure haul in the $$$
Less than 2% of lawyers make 6 figure salaries --- can't say the same for doctors
So sure you should make the same as the typical lawyer
I know an executive at a large healthcare provider. He’s a nice guy. He owns a 6000 sq ft mansion, a large vacation home, and sends his 4 kids to private schools that each cost $50,000 per year.
Imagine what the Republicans would do to education and social security/retirement funds if they got their hands on it.
The US was founded by a group of wealthy white slave- and land-owning patricians. Nearly 300 years later, we still bear their imprint.
12
True, costs are high. But about 30% of procedures are unnecessary - perhaps more. On each of the rare occasions I visit a medical facility I have witnessed waste. For instance, when I strained my rotator cuff, the receptionist told me to get an X-ray before seeing the doctor. This was in a specialized prestigious orthopedic center. I told her it’s a soft tissue injury so this would be wasteful. She called the doc and they waived the X-ray. Imagine a $200 X-ray multiplied by thousands of people, most of whom don’t know, don’t care or are too intimidated to argue.
There’s no value in most pre-op tests. Especially cardiograms. Good luck getting out of them. And so-called “prevention” can be worse than useless.
Some of the bigggest costs are associated with children born with birth defects and end of life care. Yet the government wants to cut back on birth control and abortion, and death with dignity requires jumping through hoops that are not available to most people.
2
Yes, and the reason there are so many unnecessary tests and procedures is that the average patient isn't paying for them and the providers make money.
My doctor friends tell me that they deserve their high salaries because they have medical school debt, and also because they were worked to death during their residencies. This is the ultimate circular reasoning. Medical schools charges so much because they CAN - it's worth it to students who know they will eventually rake in the cash when they graduate. Senior doctors work residents half to death because they CAN - the residents are willing because it's worth it for the eventual salary. I'm sick of excuses. The only solution is for patients to band together and demand cheaper care.
4
I think the elephant in the room here is that many of the comments, while specifically about the healthcare industry, could be applied to any big business in the US. Your government is entirely incapable of, and not interested in, protecting you from the rapacious capitalism of any industry. Healthcare just happens to be a particularly obvious example.
14
...lowering prices would upset a lot of people in the health industry.
Which would represent an excellent start.
5
given doctors average salary is less than school superintendents and drug companies are being forced to justify prices, we need to focus on hospitals to lower costs i.e. in San Francisco there are 5 hospitals within a few miles of each other who all claim to need the latest and best MRI technology but it is time to share
1
The medical field seems to be impervious to questions of cost, in part because we get much of our health care when we are sick and in no position to shop around. Secondly, the term 'medical' seems to inflate prices substantially. An engine hoist that can lift a 500 pound engine 5 feet in the air costs about 500 dollars. A patient lift of nearly the same design goes for about 5,000 dollars. Of course, it looks much nicer, but actually is not as strong as the engine hoist.
Once, I worked for a medical products supplier, and we sold pads of heat sensitive paper for heart monitors. A pad cost about 5 dollars to manufacture, and we paid about $12 per pad. We charged the doctors who bought the pads about $25, and they billed the patient $60 for a pad that cost $5 to make.
What I don't understand is the difference between private pay rates and insurance pay rates. My medical expenses were about $60,000, but the insurance companies paid the total off for around $20,000. So which cost is the one that is the 'official' cost? And is the cost of health insurance part of the total quoted in the article, or is that considered separate from health care?
It seems rather simple to me that the companies selling health insurance are supposed to make a profit, which means that they pay large numbers of people to oversee claims, do the accounting, and such. All of that adds to the cost of our health care. Single payer is the way to go.
8
Maryland has figured it out. Healthcare prices should be regulated in the same way utility rates are.
9
Americans have come to expect that "doctors" (the Latin word for "scholar" that fits few of the physicians I encounter) can do anything, and physicians promote this notion. They will promote ridiculous treatments that have no hope of improving the quality of life, but that enrich the medical specialist, the hospitals at which they practice, and drug companies.
Physicians need to give more serious thought to ethics and more education in how to be human beings. They should refrain from doing everything the can do and advise their patient about the physical and psychological costs of the treatments available. And they need to talk frankly with their patients in the last stages of life—because we're all going to arrive there. I don't want a physician prolonging my suffering for the sake of something he or she can (rather than should) do.
4
The entire health care system of "costs", billing, insurance what is or is not covered under 'insurance contracts", medication costs, etc is ALL out of control.
The role of government needs to be about stabilizing the market, and encouraging transparency, and competition, and most of all LOWERING THE TRUE COST of all health care especially pharmaceuticals.
6
"Prices", meaning maintaining inefficient and unworkable privatization. The ACA was a Heritage Foundation creation, with the goal of guaranteeing the private insurance companies an eternal source of premium funds, allowing rich shareholders to gamble in the stock market, in real estate, and elsewhere.
3
One important factor is the existence of a third party between you and your physician. Why anyone believes that having insurance companies would do anything but drive up medical costs is madness. Adding a third party rarely reduces costs. If we were all paying the costs without insurance companies, you wouldn’t have inflated prices. Why does a hip replacement implant cost more in the US than in the EU when it’s from the same supplier? Because insurance companies will pay and hospitals can keep charging more. It’s madness.
One interesting point is that physicians’ education costs more in the US. In most of the EU, medicine is an undergraduate degree. It doesn’t need a pre-med degree for entry as high school education finishes at a higher level. This would go a long way to reducing medical costs in the US.
4
We have insurance because few people can afford the cost of a catastrophic accident or illness. Cost of these can run into the millions of dollars. The only alternative to private insurance is government insurance.
2
No. Accident insurance could be relatively inexpensive because accidents don't represent more than a small fraction of health care spending.
And catastrophic illness will have a bad outcome regardless of how much is spent.
1
are american people ready to do not sue a doctor for an expected well know complication? mal practice insurance is part of the problem. Other part of the problem is the cost of the hospital administration.
1
I was in Canada a few years ago and had an infection. I received treatment from a family physician (I'm also married to a family physician in the U.S.). I asked the doctor what he thought was the major difference between U.S. medicine and Canadian medicine, leaving out, of course, the single-payer nature of Canadian medicine. He replied that U.S. consumers, when they came to his little hospital in rural Prince Edward Island, DEMANDED unnecessary tests. Case in point: He had a case of a U.S. citizen who broke his leg. Clean break, evident on X-ray. The man demanded an MRI. This doctor and the orthopedist told him it wasn't necessary, that they could set the leg without it. "If I were in the United States, where the best medicine is, I'd be having an MRI," the man said. The doctors explained that he would not be reimbursed for the cost of an MRI, since it wasn't indicated. The man insisted. They did the MRI, although they didn't learn anything from it. The man went home and received the bill for the MRI, which his insurance company would not pay. The man decided not to pay for the MRI, either, so the little rural hospital was never reimbursed for something the patient essentially ordered, not the physicians. We as Americans have to take some responsibility for the demand side of this equation.
24
The only thing that will bring the cost of health care down in this country is competition. It's not the insurance companies as they simply reflect the rising cost of the healthcare industry. Medicaid, by government measures, runs 59+ billion PER YEAR in fraud/corruption/waste. Government isn't the solution; government is the problem.
2
How can competition supply doctors to rural clinics?
2
No, privatization is the disease, and a single-payer system, expanded Medicare for all, is the cure.
8
One of Obamacare's true poisons is requiring insurance companies to raise costs in order to increase profits. When profit is capped at a fraction of premium, increasing costs is the way to increase profit.
Maybe there is hope for us. Sounds like our health care needs to move from the mutual fund model, with its generally over priced and underdelivering structures to the index model which is gaining traction in the market and that seems to reflect how most major countries have done health care for some time.
4
Following are some hard numbers from a recent ER visit for what was found to be kidney stones. I was in the ER for about 4 hours and was not admitted to the hospital. I saw a doctor, had a CT scan and some blood and urine tests, got two morphine injections for pain, and was sent home. I got two prescriptions for generic medications, which I had to fill myself at the pharmacy.
Diagnostic Imaging & Scans (1 CT scan): $3,929
Emergency Services: $1,079
Laboratory Services: $1,158
Outpatient Hospital Services: $1,026
Emergency Department Specialist fees: $830
Apparently, they charge you one fee just to be in the ED and another fee for a doctor to actually see you while you're there.
There you go. A burn rate of about $2,000 per hour to diagnose and treat a common ailment. Since I have the good fortune to have mediocre health insurance my out of pocket cost for this 4-hour medical adventure is "only" about $1,600.
14
Those prices don’t mean much - what did insurance actually pay for those services?
3
Had a similar cost-expense-coverage experience last year, 2017. Obamacare Blue Cross insured me at $14,000 that year. First ever medical procedure and three additional diagnostics scans, also first ever in my lifetime, ran at $41,000 billing that year. The minor out-patient procedure, used about four hours total and a half dozen walk in visits. The eventual payout was about $9,000, not the $41,000. The insurance was accumulated for three years prior as a solid profit for the insurance group, and my first active use would have given an income to insurance and medical group. Total of nearly $20,000 profit-overhead cost beyond the actual billed value of medical value issued. 3 1/2 year coverage, made a 300% profit and it disappeared during the 4 years. My cost over 4 years was only about $1,300. Couldn't have been better for me, yet it was a classic case of whether the unemployed due to illness, and part-timers, should receive medical care. Retired, I now face a lack of qualifications until Medicare kicks in for insurance. Both Obamacare and Trumps ranting lack of medical care refuse insurance and coverage to the part-timers, retired under 65, and the minimum wage group, who total in the tens of millions of us. All taxpayers, no medical insurance and no cost controls without Democratic Obamacare limit applied. The Republicans cannot tell the truth, and refuse a solution to cost limits.
4
So, why is all this charade? To charge one price and then style for other. Great foundation for honest free market.
Basically all hospitals are doing it for profit. They need to hire and retain expensive labor and have to have the updated technology. Everyone actually wants to get paid for their work in health care. After all, everyone needs to pay bills. Some people have expensive student loans and they need to charge enough to cover that. If we want high quality care, everyone involved in medicine has to get used to other countries' standards. Maybe the overall cost of living is lower in some developed countries so hospital fees aren't as high. America is very efficient at squeezing money from patients. The best way to live is to stay away from hospitals. I have insurance coverage (not the best) from my employer but try my best not to use it.
3
"If we want high quality care, everyone involved in medicine has to get used to other countries' standards."
That'd be GREAT: US healthcare quality ranks #34 to #51 in quality in the world, depending on the source.
Having lived in four other countries with national, not-for-profit healthcare and having had major surgery in one (as well as very similar surgery in the US), I can say that Australia's system, at least, is 1000x better.
12
Yes, the US does it for profit.
In no other industrialised nation does anyone make a profit from healthcare.
In fact, it was illegal to profit from healthcare in the US until 1973, when Nixon signed the Health Management Act (sound familiar? HMOs?).
Until we go back to that model, people in the US will continue to go broke paying for healthcare :/
1
In the US, medical professionals, equipment manufacturers, etc., use the standard USA business model: everyone wants to be paid well, wants the latest improvements and they are motivated to make up "new and improved" items and services which are often just more costly rather that really all that new or improved. Think about Big Pharma and all the drugs they rejigger a bit and call it new and give it a new Brand Name. And we have had long-lasting trends of doing expensive procedures on too many people--I had a completely unnecessary cardiac cath done on me at age 35 in 1987, for example. So the sales aspect of medicine is a big part of what is happening here. Witness Big Pharma's outlay of money for TV advertising so patients can go to their doctors and demand more expensive drugs they otherwise would not be prescribed. It is my understanding that advertising like that is restricted in Europe, for example. Malpractice insurance premiums and costs of medical education set doctors up for needing to charge high fees as well. So since medical care is just another commodity to sell, sell, sell in our system, we find that things are so expensive. One legitimate reason for higher prices, however, is that when one goes to an ER or a hospital today--something can usually be done for the patient. Severe injuries and serious diseases are not the death sentences they used to be. But medical care in other developed countries is not appreciably inferior to ours, so--what gives??
3
I was forced out of private practice and became an employee of a hospital because of the conventional wisdom of policy makers over the last 20 years that greedy doctors were over-treating patients to make money in a fragmented health-care system. No one seemed to notice that the hospital charged three times as much for the same service as the private office. Now I'm providing the same appropriate amount of care as I did before in my office but payers are paying three times as much. Thanks to the geniuses in the health care think-tanks who have no idea what is going on in the real world until 10 years after the fact.
28
If you ever talked to personnel in doctor's offices, you'd know that doctors try to bill for more services, and sometimes for services cursorily rendered, or rendered by a nurse and billed at the doctor's rate. "We're told, 'If you look at a patient's eyes, put down the code for an eye exam,'" one nurse practitioner in New York told me. Arnold Relman of NEJM exposed profiteering in the US medical profession 35 years ago. A little expense padding, done to every patient, builds up over the years.
7
They wouldn't do this if they weren't dealing with a third party payer nearly all the time.
If they expected that the patient would be paying the bill, they would know that they would have to be fair of the patient would not return (and probably wouldn't pay the bill either.).
1
This would be billing fraud in BC and probably in the rest of Canada.
2
At age 39 I suffered a miscarriage while traveling in England. When my hotel sent me to the public health hospital I was treated very quickly to an ultrasound that showed the pregnancy could not be saved. This was in before the US hospitals had ultrasounds for diagnosis. I had outstanding care with a D and C in a private hospital although I would have been perfectly comfortable with the public health one. The cost was minimal.
14
Since you say US hospitals didn’t have ultrasound yet, I take it this was before the 1970s. Maybe not an experience relevant to today.
And to think many male lawmakers would have prohibited you from that health care because it violates their arbitrary religious doctrine.
3
"Higher prices aren’t all bad for consumers. They probably lead to some increased innovation, which confers benefits to patients globally. Though it’s reasonable to push back on high health care prices, there may be a limit to how far we should."
And this, of course, is the key point. International health advances since WW2 have been driven largely by US medical and pharmaceutical innovation. Not only do US patients benefit from that, but so does the entire world, which gets to replicate our successes, without the research costs. So, the unspoken secret here is that the rest of the world hardly wishes the US to convert to a socialized health care system, because the moment we remove the incentive for the American health care system to innovate, we remove the main reason for medical advances across the globe.
2
"So, the unspoken secret here is that the rest of the world hardly wishes the US to convert to a socialized health care system, because the moment we remove the incentive for the American health care system to innovate, we remove the main reason for medical advances across the globe."
So the "incentive to innovate" necessarily means that some people are not treated.
I can tell you, as an American/British dual citizen living in the UK, that people here are horrified to see that a significant portion of the US population do not have adequate health care because they cannot afford it. No one here wishes the American system on anyone, including Americans.
31
Except its not true. Some of the largest pharmaceutical companies in the world are not American. And many innovations originate in Europe or Japan.
2
So, America decided to sacrifice a significant number of its citizens (who doesn't have access to any health care) for general good?
Maybe it is referenced in the underlying studies, but I would like to see a comparison between the US and Canadian health systems published here. How much does a oncologist make in NYC compared to Toronto? How about a nurse practitioner? How about a comparison of advanced medical equipment such as PET scanners and robotic surgery systems between the two countries. Do hospital's in Canada advertise like the ones here in the US. I cannot watch a news program without a stream of commercials from the various NYC hospitals telling me how they are the place for cancer treatment or knee replacement surgery.
We have a for profit healthcare system and a lot of people have a finger in the pie.
6
Why would Canadian Hospitals advertise...they are a public utility. In BC we have a nurse line so people do not run to the ER at the first nose drip.
2
I was not entirely correct. Canadian hospitals do not advertise for patients...unless you include private senior care facilities. But you will see ads to donate to hospital foundations and hospital fundraising lotteries. After discharge from a hospital you receive a fund raising letter very promply also.
1
To say it is all about "prices" just begs the question. Where does the money taken as a "price" for a particular procedure or treatment go?
In the US, a lot of it goes towards the insane level of bureaucracy involved in having a largely unregulated private insurance system. This system needs an expensive and entirely unnecessary army of bureaucrats to keep track of what is covered, who is covered, which doctors and hospitals are in or out of which network, what must be pre-authorized, copays, deductibles, denials of coverage, appeals, etc etc.
Contrast this with the tightly regulated and state subsidized insurance models in continental Europe, or the UK's National Health Service. In its purest form, the NHS, taxpayer funded, providing universal coverage and eligibility, and free at the point of service, is the most efficient model of all of them, simply because it cuts out the middleman.
14
Another culprit for escalating prices is the cost shift to compensate for uncompensated care. While ObamaCare's future is uncertain, compensation to hospitals for previously uninsured patients was a good thing. The Emergency Department in not the best place to receive primary care. Without affordable healthcare for all, we will once again see the return of services not paid for...by the uninsured patient. Instead those of us who can afford health insurance will foot that bill.
10
The real cause of rising prices is the takeover of outpatient medicine by hospitals. Outpatient doctor visits far outnumber admissions, yet hospitals are buying up doctors, providing outpatient visits in hospital facilities and charging over twice what free standing private practice docs charge. Payments to private doctors by both Medicare and private payors has been cut so much that private practice has become unsustainable, while hospitals are paid at a rate that covers marble hallways and multimillion dollar administrative salaries. Hospitals have 10 administrators for every physician. There is no clinical basis for outpatient care to be paid at hospital prices; it is the result of corrupt politics and lobbying by hospitals. The shift of outpatient services from the lower cost private practice setting to the expensive setting of hospital systems, and the resulting incentives for inappropriate care, more than explains the problem.
A single change in law could reverse this: Congress should require that Medicare adopt the "site neutral" payment policy that has been recommended by MedPAC since 2013---if Medicare paid hospital outpatient departments the same as free standing physicians, and that fee were sufficient to sustain the lower cost of private practices, you would see the non-renewal of hospital doc employment contracts and a re-emergence of independent practice. AND, very important, you would see a reduction in the "burn out" rate of doctors.
11
Did the study check prices doctors pay for their supplies compared to what doctors pay in other "peer" countries? This should include the costs of insurance (malpractice, business insurance, insurance for office workers, . . . ), equipment and lease/rent costs. Yes costs for care are high in the US, but costs are also high for caregivers.
5
I’d like to see the correlation with total executive compensation. My suspicions are that much of this increased spending ended up in just a few pockets.
7
Yep, finally hitting the right nail, the problem is pricing and not utilization, and private insurance has been largely ineffective at holding down costs, and Medicare is prohibited from bargaining on price. Until we get rational price bargaining, control and consistency in the system other solutions will simply be working around the question of the method of payment. Certainly a single payer system has the feature of large scale bargaining power that multi-payers have not had.
As far as research and innovation, funding, grants and tax subsidies should solve those issues. Much of the research now is funded by NIH and universities and then capitalized on by private industries. There is no justification for the current cost structures based on the value of the "innovation" delivered, in terms of cause and effect.
11
Until the physicians gain some reprieve from the soul crushing costs of medical schools it is unreasonable to reduce physician fees.
How else are they able to escape?
This is from a physician who graduated in 1964 and never heard a classmate choose a specialty by how much money thy could make.
12
20 years graduated from med school and I owe...$73,000 still.
Some argue: "Other countries have much more government involvement in setting prices." - Dictatorship? No, democracy. Germany has an independent self-governing health system. Representatives of hospitals, pharma, physicians, patients, insurance and care providers negotiate which share of the fixed amount of money everyone should get. They develop solutions that are routinely accepted without a change by the Minister in Berlin.
11
Other nations have health care systems designed around the goal of providing health care to all their citizens, paid for either directly by their governments or through private insurance schemes heavily regulated by their governments.
The U.S. has a medical-industrial complex made up of corporations. Like all corporations, their sole and exclusive obligation is to maximize the wealth of their executives and shareholders. The system is thus focused on profit and shareholder value rather than on health care, which our system calls "medical loss."
To serve corporations' imperative to minimize medical loss (which diverts money from shareholders), Americans must spend endless time and money navigating an obstacle course of deductibles, coinsurance, copays, formularies, networks, prior authorization, and arbitrary denial of care when the obstacle course is not sufficient. Each insurer maintains an army of clerks to administer the obstacle course; and each "provider" maintains full-time staff to fight with the clerks to obtain reimbursement. Other parasitic middlemen like pharmaceutical benefit managers insert their own bureaucratic burden and extract a cut for their own shareholders. None of them deliver any health care, but they siphon enormous amounts of money into their shareholders' pockets.
There is a good reason why every other country has rejected our capitalist approach that serves executives and shareholders extremely well, but fails patients far too often.
38
Ted: Yes, this is it in a nutshell! Wish I could recommend 1000x. As long as our health care system has profit as its goal, good care will be elusive.
1
Prescription drug costs are shocking, though the argument for the cost is research and inovation. Spending the winters in a third world country, at times I've had to buy my needed prescriptions here when I've run out of one or two. The cost difference has been shocking and I can buy them by simply showing my prescription bottle. Can anyone explain this to me?
7
There are two things going on here. One, you have to get a prescription from a Dr to legally obtain your medications that in other countries are "over the counter." The second thing is that drug prices are higher here because there are third party payers able to pay the higher prices, in fact, incentivized to pay more and the patient doesn't care.
4
Again, our life expectancy is 31st in the world. Almost every country in Europe with half the medical cost as a % of GDP has longer life expectancy.
The Republican presidents are responsible. During Reagan and Bush 1 years health cost as % of GDP went from 9% to 13%. During Clinton years it stayed at 13%. During Bush 2 years it went from 13 to 17.7 where it stayed during Obama years. So the Democrats have been unable to reverse this disastrous increase. Do we need a third party to bring us back to internationally competitive medical costs?
8
Since healthcare is a business will see lower health cost because of the corporate tax cuts? Will this offset the some of the loss of the healthcare mandate?
3
Corporations do not lower prices because of lower costs or generosity, only when forced to by customers inability or unwillingness to pay or by competition.
1
Don't hold your breath!
1
An especially bad idea since hope-induced hypoxia is now an excluded condition.
We're a sick country. We have for profit health care.
We're a sick people. Who would want to take care of Americans who refuse to take care of themselves?
We're a sick world. Population pressure will only increase making formerly accessible services impossible. Call it progress or pretend it isn't happening. Those are the options.
9
I was treated six months for cancer. The cost was about 150 thousand dollars. I spent 2 and a half days in the hospital.
My surgeon got what I think is a smidgen of what the hospital did. Nurses, doctors and health care workers deserve to be paid. But it is the over the top for profit system that is draining. I think going on a six month European vacation for treatment would have cost half as much maybe even less.
19
People in the industry have known for years that the difference in national health costs is a function of differences in unit prices.
Note also that insurers, physicians and hospitals all opposed repealing Obamacare even though it has allowed Medicare to continue to incent hospitals to reduce unit costs by profiting from becoming more efficient.
2
Moved to Canada in 89. Prices are more expensive for most everything. Wages are higher. Everyone gets a health care card and going to the doctor doesn't hurt your wallet. Wait times can be long for stuff like hip and knee replacements (two years). For some reason, health care here is seen as a right and not a privilege.
9
If it is a right, why do you have to wait two years.
It is rationing by the queue. Over the last while they ran a campaign to increase the number of joint replacements but I get the impression it may have ended.
1
The time between diagnosis and need are two different things.
What happened? Ronald Reagan happened. The shift to profit taking in health care happened after Reagan was elected in 1980. Review his administration's national health care policy changes.
One example, it was in 1985 that the FDA eased restrictions on the pharmaceutical industry's direct to consumer advertising of prescription drugs. The USA is one of only two countries in the world that allows direct advertising to the public. New Zealand is the other.
The authors missed the boat with this essay. The problem goes further back than they suggest.
12
Absolutely correct. Reagan started the shift to trying to make EVERYTHING a market, including health care.
4
There's a wonderful (recent) book on this very topic: "An American Sickness: How Healthcare Became Big Business and How You Can Take It Back".
NYT review here:
https://www.nytimes.com/2017/04/04/books/review/an-american-sickness-eli...
It speaks to how the profit motive has become too well-aligned between providers, insurers, and pharmas/device makers.
5
Unregulated Capitalism is pure evil.
This country and the way we ration healthcare is proof.
21
There is nothing unregulated about health care. The ACA is what, 2000+ pages of regulation.
The takeaway from this - we are paying more because we are .. paying more. In the U.S., healthcare is a for-profit business.. in other countries .. much less so.
9
Let us talk about the income of the CEOs of insurance companies and what used to be referred to as "hospitals" but are now "hospital systems". United Healthcare CEO 31.3 million, Aetna CEO to get $500 million after CVS deal. Michael Dowling, New York Presbyterian made 9.6 million in 2014.
24
In Britain the doctors drive Fords. In the US, they drive Mercedes. That tells you all you need to know.
10
You expect me to pay the tuition that I did, work the hours I do, taking huge responsibility, and make a lousy income? Particularly while bankers and lawyers clean up?
You will get what you pay for.
12
No, medics in the U.K. drive Mercedes. They are very well paid for their services. The difference here is that they are not paying huge amounts for education, a medical degree is not a postgraduate degree and so doesn’t require an ‘entry’ degree and the NHS exists. These things, amongst others, reduce healthcare costs.
Well, the services of bankers and lawyers are not critical.Healthcare is. Sure, some lawyers provide nuts and bolts for the system such as criminal work and other things. They don't get paid all that well compared to the lawyers in the land of big deals. Bankers too; without them we wouldn't have white collar criminal activities to be prosecuted or defended by lawyers. I've got a little list, I've got a little list. Of society offenders who might well be underground, And who never would be missed, they never would be missed! But doctors would be missed; well many would be missed.
We have to spend more because of our corrupt Republican-led Congress and Republican president, who live in the pockets of health care industry CEOs.
12
This is confirmed by the facts. During Reagan and Bush 1 years health cost as % of GDP went from 9% to 13%. During Clinton years it stayed at 13%. During Bush 2 years it went from 13 to 17.7 where it stayed during Obama years.
3
Actually it is the democrats who live in the pockets of health care industry CEOs. The CEOs are all democrats and everything Obama and the democrats did were complicit with their desires. (Face it Obamacare was insurance reform not healthcare reform - not a single health metric in the US has improved since passage of ACA).
And the evidence you have that health care CEOs are ALL democrats is? (or even the majority)
Obvious right wing propaganda here. Alternative facts.
"Higher prices aren’t all bad for consumers." Are you kidding me??? Of course, being European, I have lived elsewhere, I have seen other systems but with a statement like that, you probably are of the "exceptionality" school. Keep that up, the rest of the civilized world will keep their (real) universal healthcare system they have been enjoying since the end of WWII.
16
To paraphrase an infamous comment made by Karl Marx, the true god of America is money. And physicians are its high priests.
7
Physicians' high priest magic apparently is not as strong as Wall Streeters' high priest magic. At least doctors do something useful - sometimes.
1
Ot’s a “for profit” system. Healthcare providers want to sell as much healthcare as possible, and they hold all the cards. Americans are being taken to the cleaners..
7
Meanwhile, in single payer land:
http://www.telegraph.co.uk/news/2018/01/02/nhs-hospitals-ordered-cancel-...
Every hospital in the country has been ordered to cancel all non-urgent surgery until at least February in an unprecedented step by NHS officials.
The instructions last night - which will result in around 50,000 operations being axed - followed claims by senior doctors that patients were being treated in “third world” conditions, as hospital chief executives warned of the worst winter crisis for three decades.
Hospitals are reporting growing chaos, with a spike in winter flu leaving frail patients facing 12-hour waits, and some units running out of corridor space.
3
Don't forget the author listed all-payer options as well. I think the author should have dedicated more space to all-payer systems. 30 years ago a pathologist told me every procedure in the hospital lab had 16 different prices depending on who was paying. Think of the simplicity if every procedure had only one price! Hospitals and doctors are the only industry allowed to offer every customer a different price. Going to all-payer system wouldn't hurt anything and would not cost more to implement (unlike ACOs - which just add on more costs by providing salaries to more people who don't provide actual care to patients).
3
It is important to understand what the facts are with this.
The crisis in the NHS is due to the Conservative/Liberal Democrat coalition government's enactment of the Health and Social Care Act 2012 which fragmented services, devolved budgets to smaller units and forced in commissioning of new services to the private sector. Having made the NHS more expensive to run, the government has nevertheless cut funding, and has failed to fund the massive reorganization itself.
The result is as you describe, but it is purely down to Tory free-market ideology.
My daughter was treated on the NHS for thyroid cancer and received excellent treatment with not a penny out of pocket.
I will take health care in "single payer land" any day.
4
That is because the Tory government is doing its best to destroy the healthcare system.
4
The cost of gastric sleeve surgery in the Texas $15,000+
The cost of gastric sleeve surgery in Mexico, $5,000
I am an ER doc, I know plenty of nurses in my hospital in Texas who took advantage of the 5,000 price in Mexico, and had their surgery done there. Anecdotally, I haven't witnessed any alarming difference in the complication rates between surgeries done in Mexico vs Texas.
All I see is happy, healthy nurses.
Now, are you going to ask me how much I charge for ER visit in Texas?, Do you have to go there?
signed
your friendly neighborhood ER doc..
11
I think that is great.... market forces in action. That is what we need. Not government regulation.
3
Really Ny Surgeon!? With our shorter lifespans and pathetic infant and maternal mortality rates compared to just about every other developed country? Ya think that unbridled barbaric capitalism thing is working out for those dead mothers and babies?
This article would be more illuminating if it differentiated among the prices paid for drugs, procedures, and salaries, for example. I'd love to know if the difference in cost comes down mainly to what, say, an RN or orthopedic surgeon makes in the US vs other countries, and how much comes down to the cost of getting and interpreting a CT scan or MRI, and how much comes down to the cost of a beta blocker, antibiotic, or statin, for example. I suspect that US practitioners make higher salaries, especially at the top end - which would be hard to change - and that we pay much higher drug prices, effectively subsidizing other countries and drug companies. But that's just my hypothesis - I'll look for the study.
2
I don't know how this study found US prices only 60% higher than in EU. Having lived for 20 years on both sides, I'd say in EU the average costs for any procedure is 10 times less than in the US. In the US a radiologist, for instance, can make up to a 1M/y, in EUhe/she makes an average salary. Ambulance service is free.
Last year, I spent a night of horror at the ER of the Metropolitan Hospital in NYC, with inexplicable pain. I felt as if I were in Somalia. No one cared, none spoke intelligible English, care sucked, the doctor spent 30 secs with me; at 4 am he send me home with a bill of 9,000 dollars (for two tests and like 8 hours in ER, no ambulance) and here's the kicker: NO DIAGNOSIS and NO TREATMENT!
I wanted to sue the hospital but decided to move back to Europe instead, where I found out I had uterine fibromas (not sure how the US MRI and echography tests missed that) and five days in the average hospital cost me a mere 300 dollars, with all the tests, excellent care, and a minor surgical procedure.
It's a myth that US healthcare is better. Sure, the highest top-notch procedures, but the average US care feels like Somalia compared to Europe at prices 10-100 times higher. (100 times higher for cancer and any surgery).
43
This is reflected in that our life expectancy is 31st in the world. Gues who is better. Almost every country in Europe with half the medical cost as a % of GDP.
2
Stating the obvious.
A good followup would be an analysis of who the “extra” $500,000,000,000+ went to.
10
It is hard to know where to start when critiquing this piece.Yes prices of individual items of service are much higher in the US.But volume is the main driver and the studies cited to show otherwise are red herrings because they span a much more recent period than the work comparing prices over time.Of course volume has not increased between 2003 and 2007!But the fed for service model has been with us for much longer and it is the number of procedures,tests, drugs and MD encounters that is responsible for our chronically high costs and much harder to deal with than negotiating the price of an individual intervention.American HCPs have trained patients to believe that more means thoroughness and that even the most unlikely intervention or diagnosis is worth trying or excluding.Worse,medical records remain fragmented and sub specialists fear any pathology not in their “lane”.So engaging the system at the right point is a crap shoot for patients and if they get it wrong,a long and expensive bounce around is likely.The bottom line is this;we focus our medicine on acute care and throw everything we can at every case.Americans believe this is in their interest but in reality it serves to protect from lawsuits and support expensive homes and lifestyles.Oh,and by the way, I am a retired cardiologist.
3
This story says to repeat:
"one study found that the spending growth for treating patients between 2003 and 2007 is almost entirely because of a growth in prices, with little contribution from growth in the quantity of treatment services provided. Another study found that U.S. hospital prices are 60 percent higher than those in Europe"
1
the VOLUME of healthcare consumed is a function of the structure of the HC delivery system and the medical culture it exists in.Neither change over 4 years.
The New York Times recently reported that the government of Brazil pays Gilead Pharmaceutical $27 for a one month supply of the HIV drug Truvada. Here in South Florida our Ryan White federally funded program pays more than 40 times that amount. And that is after factoring in the "rebate" paid to the State of Florida. Please, please, please keep reporting on these pricing obscenities drug by drug and procedure by procedure. Keep up the good work! Thank you.
9
“In regards to the price of commodities, the rise of wages operates as simple interest does, the rise of profit operates like compound interest.
Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”
― Adam Smith, The Wealth of Nations
“The interest of [businessmen] is always in some respects different from, and even opposite to, that of the public ... The proposal of any new law or regulation of commerce which comes from this order ... ought never to be adopted, till after having been long and carefully examined ... with the most suspicious attention. It comes from an order of men ... who have generally an interest to deceive and even oppress the public”
― Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations. Volume 1 of 2
1
US healthcare is made up of small business profit maximizers with control of supply. Add to that rent-seekers like pharma, medical equipt and hospitals and you wind up with a deadly system that is literally breaking our nation.
I have an idea. Do what France does. That will cut our healthcare to 11% of GDP saving the US approximately $1 trillion dollar annually. Just do that. We don't have to do anything in the least innovative but a lot of monopolists are going to have a fairly major change in their lifestyles.
3
Poorly managed health care, excessive charges for specialty services, insurance companies, overpriced drugs and outrageous inpatient/outpatient hospital fees. Perfect storm. And, while we may have advanced services available, nobody can afford to access them except the rich. What's not to love?
7
I am a physician/scientist with 40 years of experience. I will tell you the 5 main reasons why our healthcare is expensive (there are additional reasons but no space here to explain). All my statements are supported by highly reliable studies: 1-Healthcare has been hijacked by profiteers in collusion with politicians (both parties). Administrators increased 3000% in the last 20 years; doctors 200%. There are 10 administrators/MD (75% unnecessary parasites with lavish lifestyles at doctors and patients' expense). 2-Doctor services cost only 10-15 cents per healthcare dollar spent (INCLUDES procedures and surgeries; many studies, google it). E.g., a prior United Health Care CEO retired with a 1B bonus retirement package (you read well). How was that possible? Why there are no caps on their profits but Medicare can cap what doctors get paid? 3- Corrupt profiteering by hospital corporations. We don't need to pay $20 per aspirin or $3000 per MRI. Their usual excuse is the cost of maintaining high quality is larger than in a small office; baloney!!! Here in Houston, hospital corporations are building tower after tower and investing in real estate to hide their exuberant gains. 4-Insurance Companies prefer to pay overpriced hospital rates to get higher government subsidies AND to justify their higher premiums. 5-Overpriced medications. WE (PATIENTS AND DOCTORS) ARE SUPPORTING A CADRE OF PARASITES WITH EACH MEDICAL CONSULTATION. Corrupt politicians (both parties) know this well. Sad!
34
Well said. Insurance companies and hospital bean counter executives treat doctors and nurses like draft horses. Run them into the ground and complain about having to pay them decent salaries and overtime. AMA has been derelict in advocating for doctors - that has to change.
8
The big winners, among the hospitals (and Big Pharm), are the executives, even more than medical specialists, at least at our local hospital.
Not only is the CEO overcompensated, but there are an abundance of unnecessaryk )vice-presidents.
9
And toss in all the analytics, reimbursement, and electronic health records "specialists." Its a joke.
1
I have worked in both countries as a nurse. The American system is a disgrace. Millions of people have no healthcare.
I keep meeting Americans who believe the propaganda from the AMA and the insurance companies that Canadians can't get appropriate medical care. This is simply a lie. Say it often enough and some people will believe it but it simply isn't true. I think there are just some people who can't admit the Americans are getting ripped off and have an inferior system. This is willful blindness. Any objective measure of health outcomes shows the Canadian single payer system is superior at a fraction of the cost. In the U.S., some people are making a lot of money on the backs of sick people. It is immoral.
309
"...propaganda from the AMA and the insurance companies that Canadians can't get appropriate medical care." And, of course, it is YOU who gets to define "appropriate". Even though it may not be as timely or effective as what a large portion of the populace receives here in the U.S.
1
Health care is more costly than need be for reasons other than high charges.
1 -- An Institute of Medicine study, published in 2012, found that a trio -- waste, inefficiency and the ineffective -- consumed 30% of U.S. health care $s. That's $1 trillion/y., $10 trillion over a decade. MEGA-$s. All for no patient benefit but some harms, e.g., infections acquired in connection with an ineffective surgery.
2 -- The U.S. doesn't make full use of warranted "evidence-base" methods to maximize prevention. Just2 examples: ,
A) a substantial portion of CVD, Type 2 diabetes, diabetes and some cancers can be prevented by diet;
B) doing more to reduce tobacco use could further whack lung cancer and an array of other diseases for which tobacco users put themselves at risk as well as those who are exposed to much of their smoke.
2
Haven't you heard? "Evidence based" is now one of the CDC's seven forbidden words/phrases.
10
Very convenient to blame the patients, but it doesn’t solve the problem.
When specialists graduate with $750,000 of college debt? hmm wonder why it costs more?
3
But you have to ask why to that as well. The colleges want their piece of the wealth pie too maybe. Quid pro quo all up and down throughout the system. What if doctors and other health professionals were to have no debt within 5 years and then never more than 20% of their first-year salary per those 5 years.
3
DUH.
Tons of money spent on advertising.
Huge money spent on high priced "administrators."
Overpriced durgs sold by monolplistic drug manufacturers.
Insurance companies looking for any and every reason to turn down coverage.
That is why we have very high priced medical care costs. Most other countries avoid those "rip off" expenses.
11
This is a strange article in its lack of specifics as to what changed that caused this dramatic inflation- without that information, what is the point?
We are talking about a corrupt system that costs consumers about 1.5 trillion annually, much of it through escalated insurance costs.
This is a national emergency that weakens our overall economy, makes our exports less competitive and takes away money that should be applied to much more productive uses, including education.
Please, NY Times, follow this up with a much more complete story on this.
7
The last sentence doesn't make any sense, or contradicts what is in the article.... which is that high prices don't correspond to better outcomes. Using "probably" leads to innovation means also "maybe not".. so can't be determined. And who cares about global patients, if we are paying for it??
and we "should" push back on prices.
5
This article is disappointing - it suffers from a myopic point of view and then draws the wrong conclusions from it - all while trying to sound smarter than everyone else because it tries to draw conclusions which seem counterintuitive or out of the mainstream- in science and engineering we have a thing called "root cause analysis" instead of just looking at the symptom you try and find the root cause - in this case the root cause is not "prices are too high" - the prices are too high because nobody in the system has an incentive to take care of the patient - only to make a profit. It is well known that other countries have cheaper health care and better results (a better written article would have looked at this to help determine root cause) - but they also have systems that allocate resources to maximize the health of the population for a given amount of resources - and go figure - it works!
82
What is one big piece missing from the earlier years referenced in the article....a strong primary care workforce that was valued over the fee-for-service model. Without adequate primary care physicians helping keep costs down, while giving quality care, costs skyrocketed and now 5-10 years later our countries healthcare is in a quagmire
4
One thing that never seems to be mentioned is the huge waste of resources called a pre- med degree. In almost all other countries students can go straight into medical school after having begun with medically related subjects in high school. The US adds four years and hundreds of thousands of dollars in tuition cost to the overall cost of health care. The patient, as always, pays in the end for the lost years and tuition cost in higher remuneration during the shorter career
8
I think you'd want a doctor who's aware of the greater world and has taken time to learn about the human experience in depth.
We are more than the sum of our organs, our bio-chemistry and our DNA. The doctor who is interested in this life is more likely to be effective with his/her healing arts.
1
mshea, you are mistaken if you believe a pre-med degree gives you time to learn about the "human experience in depth". You don't have any time to do that while taking semester after semester of chemistry, bio chemistry, biology, algebra, calculus, trigonometry, physics, genetics, etc etc and getting top grades in the process.
We don't need any study or a newspaper report to know this. It is obvious to anyone who is a bit informed that main issue in the US is cost of healthcare and not how we insure it.
Unfortunately the democrats play politics with healthcare by subsidizing insurance rather than figuring out a way to lower the cost.
The democrats know how to lower the cost - Medicare for all and the right of Medicare to negotiate prices for medications and services. Wait and see - it will happen.
1
The ACA was a creation of the conservative Heritage Foundation, not the Democratic party, which supported (supports?) single-payer.
1
Maybel of our physicians and surgeons will take a 50% pay cut, in addition to the hospital administrators and pharma execs?
Not happening.....
1
There are courses that will teach your physician how to turn a level 1 visit into a more expensive level 3 visit. It has nothing to do with providing more or better care - simply how to document a visit in such a way that you can charge the patients insurance company more.
7
Insurance for the wealthy like many things are for them . Give me government intervention any day to regulate prices. The capitalist way has failed miserably.
2
Wage and price controls are the only answer, for nothing so far has worked. Some will say that doctors and nurses wil flee to some other conutnry, but what country? Canada- no, England, France, the EU in general- no. So that argument falls flat.
2
That our health-care system is completely broken is hardly news. Neither is the fact that our politicians are too corrupt to do anything about it. What we really need at this point is for someone like Alphabet or Microsoft to put together a home diagnostic system that lets most people avoid going to the doctor at all.
3
Marcus Welby. It was all downhill from there.
Remember local physicians? House calls? Doctors who actually know who you are? Hospitals run by dedicated nuns? Care?
Small scale personal (intuitive) medicine seems to have been forgotten in favor of impersonal machine medicine with lots of tests and prescription drugs made from industrial waste.
1
It's pretty simply really. As recently as the early to mid 90s many traditional employers covered the premiums for their employees, but starting around 1996 or so, or shortly thereafter, the industry just started hammering everyone with annual double digit increases, eroding and eclipsing any wage gains. Paired with arbitrary caps and denials of coverage for pre-existing conditions they priced themselves out of the market and led to the outrageous testimony in front on Congress about the treatment of Americans from all walks of life by the insurance industry. It's how we got ACA - not because it was a giveaway to the lazy, but because you could work your whole life, lose your job and become bankrupted or consigned to death if you got sick or hurt in the country with the greatest health care in the world. The growth in costs was on an insane and unsustainable trajectory, held in check only recently a little. It is the worst kept secret of American life. Unless you are rich and can skirt the financial pain aging or getting sick will ruin you, and line someone else's pockets.
Death and sickness is a good business. The market never goes away.
94
But we have had the AFFORDABLE Health Care act. You mean that didn't make it affordable. Well the why did they name it that? They couldn't have been pulling the wool over the eyes of the citizenry, right.
Anyone with the sense that God gave a ground squirrel would know that we are paying far more for the same care. Well all except the folks who kept saying that Sweden has universal health care so why can't we.
We can't because we are paying too much for doctors and nurses and hospitals but then again how do you ask them to take a haircut, which is the only way out. We could try increasing competition.
1
"...these (cost reduction policies) would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies..."
In other words, given our corrupt, big money political system, there is no chance for reduction of cost.
1
You want to know why health prices are so high? Well it's pretty clear that the private insurance companies and pharmaceutical companies have a great thing going. Profits are way up in part because of government laws that until recently mandated individuals to have private and only private health insurance or to forbid Medicare from negotiating for cheaper drug prices. What a giveaway to corporate America!
What do these companies do with these high prices? They pay for lobbyists who outnumber the number of members of Congress, wine and dine them, and threaten them to vote for these ridiculous laws that ensure their profitability or risk being primaried in the next election. Forget the rubbish that they charge high prices to pay for research. The money goes for lobbyists in order to maintain ridiculous profits.
The American people should demand campaign finance reform and single-payer nonprofit healthcare.
4
When the bean counting and "analytics" executives of health insurance companies make more than an Internal Medicine Doctor or a Pediatrician in the US, something is terribly wrong. Doctors and nurses salaries are not the problem and many doctors carry massive debt from medical school. Look at United Health Group - they love their gravy train of guaranteed revenue from fat federal contracts. Six figure executives who don't even touch a patient. Sickening.
5
We have been spending twice as much as the next OECD country for a simple reason we normally call Greed. This greed factor goes not just for the pharmaceutical giants but our so called peoples representatives, the members of the US Congress and the Senate. These individuals who are suppose to look out for the interest of their constituent are more interested in working for the pharmaceutical giants.
In Europe it is very common to carry a card and visit any healthcare center and get complete quality care without paying a dime from ones pocket. Yes the citizen of Europe pay more taxes than our big corporations, but their citizens do not lose homes because they get sick.
Universal Healthcare for all is not just a slogan but a basic human right. the same that we want Iran to uphold by not killing their people who are asking for economic reforms etc. The same human rights that we want Assad to uphold. I wonder why we cannot get rid of the insurance companies from the Healthcare delivery system and let every one have medicare.
4
High health care prices, unruly as always, have contributed to the downfall of Obamacare's popularity, a factor poorly controlled in spite of subsidies and Medicaid expansion and the individual mandate. The ideal, Universal healthcare insurance would revolutionize the cost, lowering it, without necessarily decreasing it's quality. The current system of employer-dependent insurance is a deterrent as well. Wouldn't it be nice that the entire population of this wealthy country, were to be made less unequal, by making health care a right? It would improve our health by prompt recognition of illness, and cheaper to treat in it's early stages, and make justified demands we take better care of ourselves (a sensible diet, exercise, moderation in consuming alcohol, avoiding addictive medication and illegal drugs). As it stands, some hospital C.E.O.'s are making a 'killing', and so are others like Big-Pharma, medical device companies, Healthcare Insurance intermediaries. And further, the sophistication in progress to catch fraudsters trying to cheat on us. In brief, there is no reason why health care in the U.S. should cost twice as much as anywhere else, while the quality and timeliness are the same.
As a Doctor, I have never charged "what the market would bear", nor have I ever refused or modified treatment for any child due to lack of funds. My fees were always based upon what was "fair", necessary and equitable, not what I could steal from insurance companies. In fact, I never accepted insurance as primary payment because I did not want my patients' decisions to be influenced by some uninvolved, for-profit reimbursement mechanism.
I am now retired, after 45 years in practice, and I have seen huge, unconscionable changes in medicine in that time; changes that even I could not control. Perhaps the most offensive was the ignorance and non-involvement of the patients in their own care - shopping with their insurance cards instead of seeking real medical care based upon need. This opened the area for abusive fees and over-prescribing by Docs who are less than ethical. Often, the drugs that they would prescribe would be the ones they last saw from some drug rep pimping their employer's latest expensive product - when another or generic alternative might have been equally as effective and much less expensive....more
62
If the new drug were indeed the best (like many of the new biologicals), the issue became that of outrageous pricing. Even excellent orphan drugs (as is well known now) have skyrocketed in price for no reason other than excessive profit. Insurance often pays these exorbitant sums (if the patient is lucky enough to be insured), but eventually we, the patients, fork over for these bills in higher insurance premiums.
Other countries have much more affordable care, for everyone, with some excellent systems. If we, the people, would demand that our elected representatives act responsibly, prevent undue influence via lobbying and bribery and permit negotiation for pharmaceuticals on a NATIONAL basis with a real single payer system, no one would die needlessly for lack of competent, or unaffordable, care. SIMPLE, if one demands excellence and responsibility in governance. It is a shame that this will never happen under Trump.
4
"Fair" necessary and equitable for who? For most people their insurance card is the lifeline they need to get the healthcare they need.
If you didn't accept health insurance reimbursement then you most likely had patients who were wealthy enough to afford your services.
You seem to prefer patients who can afford to shop for healthcare based on what they have in their wallets rather than what they have via their insurance cards.
9
Bottom Line: America allows a "for Profit" healthcare system at the expense of the consumer. The American Healthcare system consists of lobbyists, corporations that target and are supported by our politicians that also market and push for more profits ; plus the continuous huge CEO healthcare salaries. It isn't about healthcare but profits.
My doctor suggested (not me but his suggestions) I go for two tests. Before my appointment I researched these "testing" entities to find that my doctor owned these two "testing" organizations- which would have required my co-pay along with his "insurance" claims. I changed physicians as I refuse to make my co-pay to line his pockets- keeping his side businesses in operation.I didn't go to him to discuss these concerns. I will be dead by the time America "gets it" and cares for us- the consumer- non profit healthcare like the rest of the world. . No one has the guts to say no to our profitable healthcare system.--- though Obama tried.
15
The hippocratic oath says do no harm to the patient; doesn't say anything about their wallet. Between a the viable patient-doctor trust, outrageous malpractice insurance, and a patient wanting just to feel better, we hope that insurance s the great equalizer, we are wrong.
1
In 2016, I had two teeth extracted and later on, a bone grafting for one of the extracted teeth in two separate visits to the same dentist's office. When I saw the claims filed to my insurance company, I was shocked to see the numbers. For the extraction alone, the doctor billed my insurance company $6,500. For the bone grafting, the bill was $8,000. I wish someone can explain to me how the insurance companies in this country came to view such exorbitant bills as acceptable practice? BTW, I was in and out of the dentist's chair in less than 30 minutes for each visit.
12
The US Health Care "system" serves those who profit from its use, not those whom it serves. That dys-junction and dysfunction is no different from the dys-junction and dysfunction of our economic system, which serves the wealthiest segments of our society to the detriment of the rest of us. Restore equity of one system and you will almost certainly contribute to the equity of the other.
12
Several years ago, Dr. Atul Gawande wrote two fascinating and insightful articles in the New Yorker about other factors contributing health care costs. One was about end-of-life care ("Letting Go," https://www.newyorker.com/magazine/2010/08/02/letting-go-2), which has been expanded to his book "Being Mortal: Medicine and What Matters in the End."
The other was about "hot spotters"---patients who consume much more resources than the average (https://www.newyorker.com/magazine/2011/01/24/the-hot-spotters).
Many surprises in both of these.
6
Simply put the healthcare industry is like any other industry its driven by profit and greed. From their perspective the only thing that matters is your ability to pay and not your ability to be cured or get better. If they had to choose between delivering outstanding healthcare at a lower price point or delivering subpar healthcare at a higher price point they will choose the latter every time hands down.
13
Shorter version: The US is among the only nation which considers profits for corporate insurers (who offer zero medical care) more important than delivery of care for all citizens. Our elected officials (who have very good health care provided by our tax monies) are paid handsomely by the corporate insurers to make sure things stay this way.
26
I wonder why the authors mention administrative costs of Medicare and Medicaid, but not of private insurance, when private insurance uses a vastly higher percentage of its revenue for administrative costs. I used to work for my state's Medicaid program, and our administrative costs were a small fraction of what is typical for private insurance.
43
Number one factor is private insurance company profit, accounting for 30% of increased cost, as well as increasing physician office overhead about 20% by increasing back office costs to cope with private insurance paperwork and denial responses.Number two is pharmaceutical company charges, as demonstrated by the use of canadian pharmacies for by many patients. Adds roughly 5-10% to overall costs.Number three is medical liability. Although studies tend to minimize this contribution, any clinician will tell you that it drives a major portion of the provider-patient interaction. Since each individual practitioner can not tolerate the costs of an adverse judgment, the ability to exercise clinical judgment is very distorted by this threat. For large providers, the threat is less palpable, but certainly adds a few percent to the cost which is absent in every other national system. The advent of electronic health records has actually increased the risk because documentation requirements are far more than clinically useful, leading to errors due to lack of time.Physician reimbursement is a minor factor, and is partially driven by the overall income inequality in the U.S. economy. Does an ambitious doctor really feel he should make a half to a third of his law school contemporary, or a third to a tenth of his business school contemporary? Many clinicians who enter the field with humanitarian goals, finds that the business of medicine forces them to focus on cash flow, not care.
20
Over 50% of the US healthcare bill is spent on healthcare workers including physicians, nurses, technicians, etc. We pay our MDs more than 50% more than other similarly developed countries. For example the UK MD specialist makes $150,000 per year and in the US we pay specialists $230,000 per year. Is it any wonder we spend more on healthcare?
10
But also consider that our physicians are required to pay for liability insurance, deal with numerous lawsuits that are actually passed on to the consumer; along with the educational requirements. And as someone said: our healthcare CEO's make millions. Check out United Healthcare and Aetna CEO salaries- that could pay for numerous indigent patients' care. United Healthcare: $14 million in salary and Aetna: $17 million! Doubt our physicians with required education make a piece of that!
4
Our healthcare system is a winner take all ecosystem. If you are an insurer, you win the top prize. On the day I learned my insurance would increase by 39% in 2018, Aetna announced a 39% increase in quarterly profits (not top line, but bottom line).
If you are a doctor who only charges out of network, great for you. Often times, patients learn after the fact (e.g., day surgery anesthesiologists, ER doctors) that a treating doctor was not in network. Why isn't that fraud?
A hospital who can charge the uninsured or undercovered a ransom rate (i.e., higher than they get from Medicare or private insurance), that works.
And on the patient side, if you are a Medicare patient with a supplement (i.e., higher income), you can go anywhere and do anything because there are no checks and balances.
I am a patient advocate who negotiates claims down to what is reasonable. I also see elderly clients who have the same blood tests in a week because our medical records are not sufficiently connected--even in a hospital between inpatient and ER.
So much opportunity and so little commitment to fix it.
We must stop running our government like a Silicon Valley startup. Revenue and well-vetted forecasts matter.
36
Lowering prices has nothing to do with going to single payers and everything to do with the high salaries we pay our doctors. Show me another country where doctors are paid 3m00K a year. Add to that the high cost of drugs in this country and high insurance costs and you find the answer. It has nothing at all to do with insurance companies and everything to do with doctors fees, pharma, legal and government regulations.
4
show me anther country where doctors leave medical school with hundreds of thousands of dollars in loans. alternatively, show me an insurance exec earning six or seven figures a year go's ever cured an illness or relieved someone's suffering.
9
I'll take an expensive, highly educated and trained physician any day over a pharma or insurance company executive making six figures for what? They fall in the category of high cost/low yield.
7
Let's remember that insurance giants take at least 25-30 cents of every dollar paid for health care in this country. And what do we get for that? Nothing- not a single bit of health care is delivered by the insurance company itself to any patient. Let's get rid of this waste and concentrate on delivering healthcare that makes a difference to peoples' lives.
43
The impact on costs associated with our healthcare system by way of the for-profit insurance industry cannot be discounted, either. It is a cynical business model that bets, in a fixed game, against the lives of human beings. Mind you, only those who can afford to ante are even allowed a seat at the gaming-tables-of-health. I am disgusted. Doctors themselves own this, too. Their voices would be heard if more adhered to their oath to, "...do no harm."
10
We needed a study to find out that the country spends more on healthcare because the prices are higher? A better question to ask is why are the prices higher?
17
Well, yes you do need a study to find out that we spend more on healthcare because prices are higher. It could realistically be for other reasons. Now we know better that it is now. And now it makes more sense to ask why prices are so high. And we have good reason to hold accountable the people who are responsible for those prices.
3
Medicine is big business. Big corporations are telling doctors to perform more tests and procedures to make more money. If a place does CAT scans or MRIs you can be sure they want their machines working for as many hours as possible. Annual physicals, annual mammograms, and prostate screenings are not necessary or even recommended but that doesn't stop doctors from using these occasions for unnecessary tests and treatments for issues that are better not treated. Part of the problem is lawyers "practicing" medicine without a license.
Drug companies teach doctors to prescribe unnecessary drugs all of which have side effects. Many Americans think that more tests and treatment will make them healthier which is not necessarily the case. The argument that we take our car in for preventative maintenance is not valid. A car cannot fix itself but the body can. Americans should learn to say no to the medical machine. My insurance goes up when other people demand expensive tests and treatments they don't really need. People should ask if the tests or treatment will actually change the outcome.
Frequently, the answer is no.
17
Drug companies do not "teach" doctors to prescribe more drugs -- they have no input into the medical school curriculum. I am sorry, but you just made that up. I work in this field. Doctors and their professors are intelligent people who can figure this stuff out for themselves.
The pricing of the drugs and the pricing of the tests are 10-100s times higher than in the rest of the world.
3
@Marc- They don't teach at medical school, they wait till the doctors are in practice. They bring gifts with their logo along with their samples and educate the doctors about the wonders of their ccmpany's drugs.( Some states outlaw the gifts, so they bring bags with the drugs' advertising.)The professors in med school are also tainted by this. No, they don't stand up and lecture but they are still teaching.
We could benefit from high prices?
Come on. How do we benefit when reduced competition gives us higher air fares, telecommunication packages or prescription drug costs?
It certainly benefits these industries. But the consumers? We suffer.
16
I recently went to St. Josephs Hospital in Tampa.
There was a sign in the waiting room:
"We will give you an estimate of your health care costs if you can prove you are self paying only."
If you are covered by insurance they will NOT tell you the likely cost of treatment. So how could you shop around?
31
Umm... no kidding. The question is WHY prices are higher here. I assume it's because of the middleman (insurance), as well as the debt incurred by med students, as well as the desire to fund ridiculously expensive procedures for the very few, which makes all the ordinary procedures more expensive to help pay for them. But an actual analysis would be nice.
15
It's not just the prices since reimbursements are typically significantly lower, but the amount of unnecessary tests that are being performed. My eldest son is a ER radiologist at a major east coast hospital who claims that "defensive medicine" due to rapacious malpractice legal firms is a prime culprit. Physicians are often sued for not performing a test even if it was of little value and rarely needed. The U.S. is the only country that allows such malpractice and it accounts for trillions of dollars in excessive testing.
16
Medical malpractice judgments in favor of the plaintiff rarely occur without utterly spectacular negligence by the doctor(s), the kind of carelessness that kills or incapacitates their patients for life.
5
Healthcare prices are comparatively high in the U.S. because its healthcare system's reason for being is the pursuit of profits. It's a hard-core market-based capitalistic system rather than a socialistic single-payer system designed to serve the healthcare needs of the public. Healthcare should be a public good available to everyone, regardless of ability to pay, but the U.S. doesn't have that.
45
Have you ever lived in a single-payer country? I have. So let me point out that a. A single-payer is not socialism. B. It involves profit as all such systems have the option of private care for those wealthy enough to afford it. C. They all require management of care, so that certain expensive or experimental treatments are not covered. This said, such systems are much better than the mess we have here for the simple reason that they are more economical. If you think that doctors in Norway, UK or Israel are not interested in making money, I suggest you travel more.
Everything goes back to the political gridlock and influence peddling in Washington and state capitols that allows the private sector (not just in healthcare) to write the rules the way they want. End gerrymandering, the electoral college and voting restrictions and allow democracy to work again in the US and we will be just fine.
11
I agree with conclusions of this article. What would be very interesting is to see which of the main sector(s) of the healthcare economy - the doctors, the hospitals, the pharmaceutical industry and/or the insurers - received the lion's share of the increases. This could be helpful in determining future price regulation.
My sense is that, on average, doctors are not seeing large increases in their salaries due to greater cost containment by insurance companies. Although this study seems to pre-date Obamacare, insurers are now limited to costs and profits of 20% of its income, which seem reasonable.
The real beneficiaries of the free market for health care prices are the hospitals and the pharmaceutical companies. These additional monies probably do bring more and better drugs and improved hospital facilities but the price is not worth the corresponding benefit.
4
The 20% profit cap is on top of costs including executive salaries, marketing activities, lobbying activities, and "free benefits" such as dental, vision, and other services which drive up the cost without necessarily adding to the provision of actual medical care.
3
You are referring to a portion of the ACA known as the Mandated Loss Ratio provision or MLR (see below link). The MLR states that insurers in the small group and individual medical insurance markets spend at least 80 cents of each dollar on medical care and the other 20 cents on ALL overhead, including administrative costs, salaries, marketing, etc. The 50+ employee group market has an MLR of 85%, with 15% going to overhead. Health insurers typically earn anywhere from 3% to 5% profit on their medical business (compare that to Apple or Google). However, the majority of those that chose to enter the Obamacare Exchanges have lost hundreds of millions of dollars. Insurance company profits are driven primarily by investment income, ancillary lines of coverage, etc. While many insurer CEO salaries and stock options seem outlandish, they are a small fraction of overall revenues.
https://www.kff.org/health-reform/fact-sheet/explaining-health-care-refo...
After a flight to Paris I became concerned about Deep Vein Thrombosis (DVT) in my left leg. The Hotel called a physician who came to my room within forty-five minutes of the call. The doctor asked about my medical history, took my blood pressure and examined my leg. The diagnosis was a muscle spasm. I was prescribed a week's supply of two muscle relaxers which I purchased the next day for less than $35. Total cost for the Physician's visit $180, including the Hotel's fee.
In the US a visit to the Emergency Room would have been required. Average emergency room costs vary wildly based on treatment, but a 2013 National Institute of Health study put the median cost at $1,233. https://www.debt.org/medical/emergency-room-urgent-care-costs/
34
And you haven't even mentioned the exhorbitant drug prices charged in the U.S compared to other be countries.
2
So France/Paris was about 10 times cheaper - at least. In NYC the ER visit is many times above $1,233
3
Insurance companies and their zeal to negotiate prices, even reasonable prices, has caused providers to inflate the cost of their services. For example, for my last blood test and urine analysis, the lab charged over $380, and the insurance company paid $48+ while I paid zero. It would be reasonable and affordable if the lab could charge $48+ to everyone, with or without insurance. Same with hospitals, imaging labs, doctors, and other medical providers. But insurance companies have forced providers to charge outrageous amounts just to get a reasonable amount, and in our for-profit medical industry, too few providers will charge that low, negotiated rate to the uninsured.
13
I sense a hint of blackmail in the warning that pushing back on prices might impede innovations that will eventually help patients. A hidden warning "pay high prices or they will stop developing medicine that will save lives". It's an offer that we can't refuse.
12
Well-written opinion.
I'd suggest that there exists an additional contributor to the higher priced US Healthcare system.
We have in the US a cartel of available medical doctors, most concentrated in the larger urban / suburban locales. The number of medical schools stays the same, the number of graduates stays the same. Pretty much so.
We also have rampant conflict of interest among the healthcare services professionals. The constrained number of physicians makes it living from the number of services they prescribe for their patients. When they are business partners with the hospitals, the MRI rooms, the testing labs and the like, well, the conflict of interest creates lots of financial returns to the physicians.
That's not to say that all doctors are in it for the money. But enough of them for their profession's accountability for the high cost healthcare system to matter.
10
The only reason prices are so high is the heavy foot of the federal government being involved in nearly every medical transaction.
2
That’s an interesting argument, considering that the comparator countries that spend 50% less on healthcare have MORE government involvement than the US does. I lived in Europe for three years, and trust me, the quality of care is excellent there.
20
The only reason? Surely you intend this statement to be a joke. Your "explanation" scarcely touches on such clever advance as ratcheting up the prices of drugs as high as possible, with the consequences for the humans who need these drugs not even an afterthought. I suggest that unfettered capitalism, in which a life-saving drug is equivalent to an automobile battery to the corporation, just another source of profits, is a much more plausible reason for high costs.
2
Prices here in the U.S. are more than in all the other countries that have Government run healthcare because...the Government? Try again. Some things *can’t* actually be explained by the same old tired talking points.
1
It is not surprising that Healthcare is more costly United States, most things are higher-priced here. What is ironic is to say that we just need to charge less. It’s not that simple, given all of the factors that lead to pricing and cost. From the physician side most are in debt from $200,000-$500,000 at the end of training. Europeans ( and most of the civilized wired) have college and medical school paid for by the government and therefore their physicians come out of training with no debt. American students have the opposite problem with colossal debt. So doctors could charge 20 percent less but they need to have their education completely reimbursed so they are not starting their earning life at 35 with a mortgage of over a half million to pay on their education.
15
I assume MDs know the cost of Medical School before going and must believe it's worth it.
Clearly prices are the main issue.
Any solution to our costs must recognize that healthcare is not and cannot be a free market. A free market needs a product, a buy, a seller, an offer, negotiation, reasonably symmetrical information, and the ability of either party to walk away without much harm. In our system the buyer and the payer are not the same so the payer is not involved. Information is massively asymmetric . There is literally no ceiling for fees that are charged (although insurers will negotiate discounts or fee schedules when able). For most high cost cases the consumer cannot walk away without often lethal harm.
So until we get to a mandatory fee schedule imposed on all payers and all patients services as we do now for Medicare we will not control costs. Every westernized country except the US has done this and none of them think they should do what we do.....
16
I would note also that another article today describes something that we do not do but a true healthcare system does. The need is recognized and managed and paid for - not rejected because it doesn't fit into any service code box - https://www.nytimes.com/2018/01/02/world/europe/netherlands-falling-elde...
1
Swap meet bargaining on all your doctor and Hospital bills is the answer. You ask for (demand) lower bills, you can get them. Yes, it is a time consuming process. I always want at least 1/3 off.
3
Wow, you called out the prices, and then you walked it back in the last paragraph. Chickens! The reason Europeans have lower costs is because of price controls. But in this country, we practice human sacrifice to appease the capitalists. Could pharma possibly stand to have a net profit lower than 20%? Could specialists possible stand to make less than $300-$400k? Could hospital and insurance execs possibly make less than several million a year (worse, in the case of the big nationals like Aetna and Cigna)? Could we please have med school tuition at less than $350-500k? (including residency?) We could have all that...if we had price controls and better tax structure that helped EVERYONE instead of the top 10%.
40
Reducing the number of insured could also dramatically reduce prices as it could lead to an actual working market of prices in health care with consumers choosing according to cost, forcing health care providers to compete on price.
The current system is completely irrational, combining the worst of single payer and market based systems.
Because of the prevalence of insurance, there is no price transparency.
Substitute health savings accounts for insurance and one goes a long way toward remedying the situations. Those with low balances in their health savings account could by government loans and possible grants (in the case of the disabled or others where appropriate).
With the patient as the payer, the patient will regain more power to demand the services that the patient wants at prices the patient deems appropriate.
Third party payer systems are always handicapped because the third party is not a good position to judge the necessity or quality of care.
Especially now, with information so readily available via the internet, is the time to restore the power of consumer choice.
3
This would be a disaster! That's what the Republicans want, but they know nothing. Obtaining medical care is not like buying a Chevrolet - this is not apples v apples. The patient has little or no understanding of necessity or options. Competition in the insurance market profits really one the providers ultimately. When you choose cheap, you get cheap. The ACA attempted to fix that, and the Republicans and Trump destroyed it in every way they could. Did YOU vote for THEM?
3
(1) There is no price transparency, without which it's ridiculous to think the consumer has or can have any power to negotiate price.
(2) Seriously? Someone who's having a heart attack has bargaining power?
(3) Seriously? You think that the consumer has any appreciable negotiating power when it comes down to money or your life? Seriously?
1
This commentary, as well as the study published in JAMA, does not appear to take into consideration the tremendous impact that wide adoption of the electronic health record (EHR), has had on the cost of health care in the US. The implication that an increase in charges for healthcare is a reflection that “more is done” per hospitalization or ambulatory visit in the US, may seem logical, but a more likely explanation in my opinion (and experience)is that the wide use of the EHR by physicians, hospitals and health systems has resulted in a more effective method of charge capture. There is little, if any, evidence that the EHR improves the quality of care, as was intended by the ACA. Rather, the EHR appears to be a very effect charge capture methodology. Unfortunately the not so subtle message to physicians that use the EHR, and the vast majority do, is to document everything that was done, or comes to mind, so that the level of service and DRG, can be accelerated. Taken to the most extreme possibility, the over utilization of templates for the history and physical examination, becomes an all to easy means of over inflation of what actually occurred during the encounter. I encourage the medical profession to advocate for an objective study to document whether such exaggerations compromise the quality of care and exist at a sufficient level to warrant electronic monitors that would reduce such occurrences.
6
"Higher prices aren't all bad for consumers. They probably lead to increased innovation.
Pharma companies spend more on advertising than they do on innovation. Also, much of the innovation is done by universities and by government scientists. Our taxes pay for the innovation and then corporations profit from selling us what our taxes paid for.
81
Remember when Pharma couldn't advertise? It was a big deal when they finally started allowing it. I miss those days, not just because of the absurd spending but the evening news has never been the same :)
10
Not so much!
The article presents lots of information about health care and its costs in the U.S. The commentary concludes by saying that some pushback against high health care is "reasonable," but adds that "there may be a limit to how far we should." Why? Why may there be a limit to how far we should pushback against high health care costs? How far, Mr. Frakt and Dr. Carroll, is too far when pushing back against health care costs in the U.S.?
12
The last paragraph is odd. Yes, higher prices are not always all bad. Look at the iPhone for example or the Tesla. But they are bad when they are opaque and when the purchaser doesn't have full control over the decision to buy.
20
This article proves that higher prices are the reason the US has the highest health care costs in the developed world. But who wrote the ending? That last paragraph makes no sense, and entirely contradicts, everything that precedes it.
("Higher prices aren’t all bad for consumers. They probably lead to some increased innovation, which confers benefits to patients globally. Though it’s reasonable to push back on high health care prices, there may be a limit to how far we should.")
14
I am curious if a significant part of the disparity between American vs. European healthcare spending has to do with costs being billed at different points within the timeline - European taxes are much higher than American taxes, etc. I'm not sure this was explained in the article & I'm simply curious about factoring in that difference before comparing overall costs. I'm sure at the end of the day, the US is still much more expensive overall.
2
Yes, Meg, taxes in other countries may be higher and that is to pay for the costs of universal coverage. What American's should consider is that the rest of the developed country's populations don't have the same level of debt (public and private) used to pay for all those "toys" (aka, monsters homes, boats, SUVs, etc) that make those purchases possible which are essentially financed on the public purse.
Americans are making the choice to pay for higher healthcare through higher prices that the wealthy can afford but at the expense of the middle and lower classes. It's not a particularly fair system, but one you all subscribe to, so don't point the finger at other countries saying we pay higher taxes for our health systems -- we just choose to pay for it differently, while distributing the benefits to a wider swath of our populations.
17
I have always assumed this was indeed the case (that taxes here in the UK would be higher than in the US), but when I checked, I found that this is not actually true, certainly not here in any event.
Here, the median annual income is just over £35k (just under $48K), with deductions for income tax (£4700) and national insurance (£3220 - health & state pension), that leaves people with take-home pay of just over £27k, or a shade over 77%. Lower paid people will take home a significantly higher proportion, as there is no income tax whatsoever on the first £10k).
In the US the median income is $59,039, and after income tax, social security and medicare deductions, people would have something like $44k, around 75%. Out of which they then have to pay health insurance. The income figures are from the respective census bodies (the tax calculation is from a website called taxformcalculator.com).
Taxes and contributions are higher in continental Europe, but they have all sorts of welfare state stuff that we (regrettably) have done away with, such as free or heavily subsidised university education, generous unemployment benefits, etc., while we have tuition fees and lower social protections (i.e., we're more like you). Valuable stuff, in the long run.
1
Brick-and-mortar purveyors of durable medical equipment to those on Medicare typically charge 2X to 3X what the same stuff can be bought online for. However, the online stores will not deal with Medicare, so there is a captive market.
I can understand the need for somewhat higher prices to support their physical presences. But nothing I have ever compared between physical stores and online has such an egregious multiplicative factor.
5
Thanks, this article is a good beginning.
An analysis of US health care as a business system that identifies all the "toll booths" that have been added since 1990's would add further clarity.
Whatever the costs, Healthcare leaders cannot explain why US healthcare quality ranks 49th among first world nations.
13
Previous excellent NYT articles by Elisabeth Rosenthal clearly established our central health care financing problem is the exorbitant costs of medical tests and procedures. So far, politicians of both parties ignore this critical problem, and instead focus on rearranging revenue streams. This is safer for politicians, but harmful for our country.
11
Instead of just giving up on the notion of a competitive market for healthcare and falling back on the promise of a single payer system, we should first consider how to make the market truly competitive. Pricing should be transparent to all and known ahead of time (even in emergency situations, there are knowable fees like emergency room admission fees that should be transparent to all) instead of the after-the-fact surprise coming from the insurance companies. Of course, not everyone would take the effort to shop around, but enough would and the providers would clearly see each other's prices that this would be a significant competitive force. Let's also make health outcomes public so that people can shop around for what they are seeking, which are positive health outcomes. Single payer is fraught with regulatory bureaucracy leaving little room for innovation and personal choice.
3
Your last sentence with respect to the idea that only a private system will have innovation and personal choice couldn't be further from the truth. These are just the age old deceptive talking points of the industry that does not want to see their cash cow dismantled . When administrative costs are eight to ten times higher than single payer systems with poorer outcomes and considerably higher costs, there is no worse system for regulatory bureaucracy than what exists in the private healthcare system in America.
You might want to ask yourself why then is America the only western industrialized nation continuing on this same "failed" healthcare path? Its industry lobbyists and their money, bottom line.
1
For many people, market - based health care leave no room for personal choices or innovation or even health care at all
2
As long as we trust in supply and demand to set prices, we will continue to pay dearly as there is no price competition in health organizations!
This is a simple case of Cash Cow attracting wolves who work to generate more cash flow ... to their wallets.
The conflict between providers and payers is non-existent and hospitals are regulated to prevent competition. The clear equitable outcome is to either deregulate hospitals to stimulate price competition (releasing a plethora of health terrors) or regulation of health prices, a much more difficult proposition that it sounds.
2
Years ago I listened to a report on NPR about medical costs. It's been years so the prices are probably different now, but at the time a major company was selling it's MRI in Japan for 25,000 dollars and the exact same machine was sold in the US for 250,000 dollars. When the NPR reporter asked why they sold the identical machine at such a high cost in America, the spokesman answered, "Because we can."
44
This reminds me of a NYT article about an American who went to Belgium to get a hip replacement surgery because of the price difference. It only cost him $13,660 (including hospital stay) there, whereas in the US he would've gone bankrupt with a bill close to $100k.
http://www.nytimes.com/2013/08/04/health/for-medical-tourists-simple-mat...
42
It’s not going to the doctors, I can tell you that much.
Signed, MD
33
I have a friend who sells medical supplies (bandages, surgical supplies,etc) to so cal area hospitals. He's doing about $225k/yr including monthly bonuses. I'm glad he's doing well, but that tells me something is out of balance.
4
It depends on the type of MD. Some make okay money; specialists, in my experience, make an eye-popping amount of money.
It is going to somebody. Who do you think?
my friend did not feel well last winter in florida.went to emerg.told her to stay the nite nothing done and bill was 17 thousand dollars.unreal.
29
Similar thing happened to a friend of mine. Except, he was in the ER for 45 minutes and his bill was $9000. I am retired and spend most winters in the US south as a snowbird. Two things terrify me about being there; guns and being ensnarled in the US health "system."
6
That last paragraph gave me a good laugh! We all know which sacred cows need to be slaughtered, yet we're afraid to even give em a little shove. See you again with more of the same studies in 5 years, 10 years, etc...
23
Funy comment, and so true. Uwe Reinhardt wrote tons of articles for the New York Times, and by now he must have given up all hope to change the cruel US health system. Yet he is happily quoted by others, again and again.
An entire story about why health care in the US is so expensive with a single mention of for-profit private medical insurance? Charge high, deny care, then stiff the doctors. Uwe Reinhardt was one of the first proponents of getting rid of these robber insurers. Haul them all in on RICO charges.
26
Here is what is driving the cost of Health Care...
the Profiting off health care delivery in the Wall St. casino.
http://markets.on.nytimes.com/research/markets/usmarkets/sectors.asp?sec...
19
Heather Bresh, Mylan CEO (and daughter of Senator Manchin) who raised Epi Pen prices over 600%, and other pharmaceutical companies who are robbing Americans blind, contribute to our health care rip off in the US. Soon no one will be able to afford any drugs. Hospital CEO's making millions with too many administrators also contribute to high costs.
17
I do not care about what big business gets "upset" about. Health Care is a human right.
29
When you turn a country into a business, this is what happens.
43
I moved to The Piedmont area of North Carolina, near Charlotte, a little over a year ago. I was in excellent health for a sixty four year old! Figuring, I would eventually need a GP, I sought one! There is no such thing as a private doctor in practice down here. Everything is Clinic style where you sometimes see
seven people before the Doctor! They all get salaries! There are two health systems. NCHS and Novant! They behave like the Hatfields and McCoys, when it comes to sharing information! So, do you think costs are high under such a system?! Maybe, everyone speaks English, but the care is mediocre, and at times, scary! Avoid the medical community like grim death! Above all, Stay Well!!! PS Supposedly, I knew that already. Oy.
18
The next trend in US healthcare will be to charge you rent for all the little holding cells you are shuttled to and from before you actually see your doctor for five minutes.
8
Gee. I actually thought for a while that Aaron Carroll would at last admit that mere rip-off greed is to blame for high US medical costs. The headline says it, the article says it, the cited authorities say it -- but good ole Aaron has to wiggle out in the last paragraph with his usual nonsense that it's justified by all that lovely US medical innovation.
The US government disagrees:
“Higher prescription drug spending in the United States does not disproportionately privilege domestic innovation, and many countries with drug price regulation [eg, UK, Switz] were significant contributors to pharmaceutical innovation.”
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866602/
Even within the US, most medical innovation happens in gvt-funded labs:
"Forty-six per cent of the drugs developed by PSRIs [public-sector research institutions] got priority reviews from the FDA (an indication that they offered a substantial improvement over existing treatments), compared with 20% of the drugs from the private sector. Virtually all the important, innovative vaccines that have been introduced during the past 25 years have been created by PSRIs.” http://articles.latimes.com/2011/feb/10/news/la-heb-drug-development-tax...
Man up, Aaron. Just admit that US Healthcare Inc is theft with a stethoscope.
46
Hey! You're arguing intelligently. And with facts! You know that's not permitted when the subject is expensive medical care where the cattle are supposed to just shut up and write a check.
2
Read this following paragraph carefully (pulled from the Charlotte Observer:) Woods’ predecessor at Carolinas HealthCare, Michael Tarwater, retired in June after 35 years with the system and 14 as CEO. Tarwater received about $4.9 million for the first six months of 2016, including salary of $853,000 and bonuses of $1.5 million and $2.3 million. His compensation for the last full year as CEO was $6.6 million in 2015.
The CEO of this 'non-profit' received 6.6 million dollars in pay in 2015. It's the compensation, stupid.
19
The other western post-industrialized nations long ago concluded that health care was not a good fit in a "free market" capitalistic system. The U.S. clings to this idea in spite of mounting evidence that we are paying much more for health care that doesn't measure up well with other nations.
Everyone has their own horror story. But to me, the quintessential example of where our health care system is failing is in the cost to consumers of epi-pens, used to combat dangerous allergic reactions. My son has a severe seafood and shellfish allergy; he carries an epi-pen wherever he goes. They cost pennies to make but we are charged upwards of $600 apiece for a life-saving tool that ought to be sold in pharmacies for $25, if that.
Insane!
28
You should fly to Paris, check in at the Georges V, buy a basket full of epi-pens ($17 somebody told me) take several tours (I recommend Monet's gardens at Giverny). I know it takes more time than to go to the local pharmacy, but think of the money you'll save.
3
There is little that is capitalistic about our health care system. The government is involved n it up to their necks.
The richest country in the world and we cannot even guarantee basic free healthcare to everyone.
11
Richest country? Based on what?
After Trump's tax bill, yes, the richest will get richer and divide Americans even more. and when the Republicans change the healthcare, millions more will go bankrupt from healthcare. It won't be long before America is NOT the richest country but a third world- if we aren't caught in a nuclear war.
2
At one time so many pharmatours were showing up at Canadian border towns to get 'scripts filled they voided local inventories leading to a ban on any more foreign scripts being honoured. BTW all care in Canada is provided by private enterprise who runs the system provincially, it's just that they submit bills to one source thus the "term single payer"
8
"And lowering prices would upset a lot of people in the health industry." And you say that like it's a bad thing?
30
This is a curious story that completely misses the pink elephant sitting in the living room: private health insurance margins and markups.
Overhead costs for Canada's national health insurance are three per cent vs 30 per cent in the U.S. where physicians are routinely second-guessed by insurance agents without medical treatment.
The U.S. loses trillions to parasitic leeches who live off America's high mortality and hospital prices 200 per cent greater than other countries.
For some reason the authors are cautious about pushing back against robbers but this game will not be won by the faint of heart. It will be won when the massive private insurance tumour is excised from the body of health care.
30
It's become acceptable and even praiseworthy in the US to make BIG money off health care delivery in the Wall Street casino.
The total share value for Health has doubled with the Affordable Care Act.
3
I do not have a solution to the cost of health care. But, to all of you advocating single payer, consider that you essentially will be putting the entire health care system into Donald Trump's hands and the hands of a conservative Congress. Y'all ok with that?
1
In Canada health care is a PROVINCIAL responsibility. Each province has a unique system. Tax dollars are transferred from the Federal Govt. to the provinces by a funding formula which is renegotiated periodically. A quasi dictator like drumpf would not be possible under the Parliamentary System. Plus the presence of Quebec and it's unique position in Confederation I believes provides protection to the entire country.
3
Well duhh! Who needs a study when all you have to do is check what they would have charged you if you didn't have insurance. The outrageous price increases that have made the news over the last year should tell you too. Folks, we are in the age of price gouging as an acceptable practice. Single payer or price controls are the only answers. The problem is big business, lobbyists paying for political campaigns, and zombie Congress and Executive departments.
11
Drug companies and 'Health' providers control this entire nation.
We'll have universal income before we get universal healthcare in this country.
2
You are wrong about providers' cost. It is a myth created by healthcare business profiteers as a scapegoat distraction. Physicians spend 10-15 cents per healthcare dollar spent. Many reliable studies show this. read for example: https://www.forbes.com/sites/carolynmcclanahan/2012/01/19/physician-pay-... or
https://www.jacksonhealthcare.com/media-room/news/md-salaries-as-percent...
Profiteers have hijacked healthcare. There are 10 "administrators" per doctor in the USA (parasites of the system). In the last 20 years, the number of doctors increased 200%; "administrators" 3000%. Please google this information and become informed before falling for the usual trap. I may make 200K per yr. but it cost me 28 years of formal schooling plus a life of sacrifice for my patients welfare.
2
US Healthcare industry has morphed from being there for public good to an industry that wants to take the last $ from American citizens. They use tired talking points like "we have the best health care in the world", "we invest a lot into R&D" etc which ring hollow to keep justifying the greed and focus on profits.
When you walk into a hospital or a clinic, I as a patient get the distinct impression that you are patient only as long as you insurance and nothing else. Good news is the greed will convince a lot of citizens that Medical industry needs to be curtailed as they are approaching a share of GDP that is just not sustainable. In practice also the fact that Medical industry is more expensive and highly profitable is shown by the fact that Doctors and Nurses from anywhere in the world want to immigrate to US to make the big $s.
7
It's unfortunate that the only study quoted in the article comparing U.S. hospital prices to those in Europe is over 10 years old (2007). I would guess that the difference is now far more than just 60 percent.
In any case, I am perplexed by the author's conclusion that "Higher prices aren’t all bad for consumers. They probably lead to some increased innovation." Should we welcome higher prices for every product and service in the name of probable innovation?
10
Healthcare needs to be run on a largely non-profit basis.
Doctors should be trained for free, paid fairly during their internships, and then make a salary commensurate with their important contribution to society.
The financial parasites within the sector, however, should be compelled to clean up their act - or else find themselves excluded from participating in any taxpayer-funded national health care activities.
13
It's not: "the prices." It's: "we don't have single-payer government run healthcare" as does every other advanced country in the world, making our system the most expensive by far of all of these.
One doesn't need elaborate analyses to figure this one out.
10
While single payer would be less expensive, every other developed country in the world has universal health coverage but only some of them have single payer. Germany, Switzerland, the Netherlands, Japan and others DO NOT use single payer systems. They all have much more government involvement in setting prices though.
10
The bottom line is that top people are expensive, and we as a society choose to put much of our best and brightest in the medical profession - along with requiring them to undertake a long, expensive, and involved training period. Some cost saving may come from increased efficiencies and price transparency would certainly help improve competition, but short of a Draconian halving of existing doctor, nurse, and other staff salaries, it's simply impossible to cut US medical expenditures in half. The world pays half what the US does simply because they pay their people half what the US does.
Next time you're about to go under on the operating table or you're begging for help in an ER, announce in a loud voice how everyone in the room is overpaid and you demand to pay them the same as New York City public school teachers, like they do in Finland. I'll be eager to find out how that works out for you.
1
On average US physicians are reported to be paid around $250,000 to 300,000/ year. Allowing for exchange rates that's similar to what physicians are paid in Canada and Australia. Of course, there are specialists in the USA who earn millions of dollars annually. But that happens in Canada and Australia as well. I don't think physician fees are the main reason for the extremely high costs of healthcare in the USA.
8
Except, somehow, even in countries with incomes at the same level as the US, the doctors don't earn as much but people live just as long and have the same mortality rate. So wouldn't it make sense that we are throwing away a lot of money on salaries that simply aren't required to attract the appropriate level of person to the profession?
8
The US wastes incredible amounts of money on health care that isn't useful or is even harmful. Saving money by reducing that spending doesn't involve cutting physician or nurse pay. It involves spending wisely. See http://www.choosingwisely.org/about-us/
6
In some countries, healthcare is provided based upon the philosophy that it is a human right. In this country, it is delivered based upon the philosophy that no care can be given unless someone is making a profit. It is no mystery why healthcare and insurance executives, as well as many physicians, are among the richest individuals in many communities.
18
Yes, indeed!!
This chart shows Managed Care plans (HMOs and PPOs) and the drug companies are the worst for sucking their profit off our health care delivery.
We have a malignancy that needs to be flushed and irradiated.
http://markets.on.nytimes.com/research/markets/usmarkets/sectors.asp?sec...
2
As a primary care physician, I have been a proponent of a single-payer solution since 1996 to try to remove some of the profit motive. You do a small disservice when you lump all doctors together as benefitting from the status quo. The AMA primarily represents the interests of the specialists who are doing quite well.
41
Here is a recipe to solve the problems of US
Health - Tax meat products, subsidize vegetables and greens. Single payer health system.
Poverty - Tax charities and religious institutions. Use collected money within USA to raise the standard of living of poor US citizens rather than spending it on missionary work with the goal of religious conversion.
Bible belt is probably where the highest number of teenage pregnancy occurs ensuring lifelong poverty.
Education - Make pre-school compulsory and extend school hours from 8 am to 5 pm. Expand the school curriculum to include basic things that many parents fail to pass along to make good citizens. Free higher education. Federal school districts - ensure high standard for all school districts.
Addiction - Heavy on SIN TAX and make community service mandatory.
7
Healthcare and business have opposing goals. The goal of health is to not be sick, to not need a doctor, to not need a hospital. The healthier one is, the fewer medical services are used and needed. A healthcare business model based on that concept has a problem.
What is the purpose of a business? To make a product or service that a customer is willing to buy in order to make a profit. A business that sells a service makes even more profit by selling more services. That has nothing to do with customers being healthy and it goes against the nature of a profit making business to sell less product and make less profit.
4
"Higher prices aren't all bad for consumers."
Yes, they are bad. When it gets to a certain point--and we've long passed that point--it's bad. If it were not, we'd have the best system in the world as measured by infant mortality, life expectancy and other barometers of how healthy a nation is. We're not even close to the top in terms of these things, and it seems a fair bet that unaffordable health care is a prime culprit.
10
Partly, we might collectively look at the mirror (preferably naked). Partly, we might come to terms with age so that we do not think there's a medical based solution to restore youth. Partly, we might start thinking about maintenance of our bodies. We get information about routine maintenance on our automobiles but many of us pay no attention to the needs for maintenance such as diet, exercise, sleep. All of these thing can help but we also need to take steps to reduce pharma prices, excess and pointless services (like tacking on undercoating on cars) and some method to include a way to get prices for medical services. Single payer appears to be the most efficient way to throttle down prices.
1
What about the fact that we pay not only for hospitals, doctors, and drugs, but also for a giant superstructure of private insurance companies, their markets, etc.?
It seems that one of the cost savings of single-payer is the elimination of the insurance overlay.
13
Drs. Carroll and Frakt,
Great example of analysis to paralysis! 95% of the post explaining the why we spend so much, 4% on potential solutions, and, last, but not least (so not least) 1% on warning that perhaps we might not want to spend less after all!
Keep writing in this vein, keep spending more time discussing the current situtaion, keep giving short shrift to the solutions, keep ending with caveats and one day, maybe you guys will be rewarded by an acknowledgement from our President that gee, healthcare sure IS a complicated subject.
You academic types are so inspiring! Knowledge truly IS it's own reward. Whatever you do, just don't write with an eye to presenting actionable intelligence about healthcare reform, because really, that's what politicians are for. Your job is just to educate, educate, educate and look for more things to study. Uwe Reinhardt was correct that he wouldn't live to see universal healthcare achieved during his lifetime, and with any luck, the rest of us won't either.
4
It would have been valuable for this piece to make a distinction - and perhaps explore the differences - between "price" and "cost". While costs influence prices, so do other factors. Prices are set by providers (or, more often, by insurance companies) to cover costs and risks and profit. We should work on understanding the real costs of the healthcare we are consuming and then discern whether the prices we are made to pay are reasonable (or get to the bottom of why they are so unreasonable).
2
Our healthcare system is a bad joke. My healthcare insurance cost more per month than my first house payment did. It just went up $200 at the beginning of the year to $1,400 per month for me and my bride. We still have to pay a substantial deductible, so we're essentially giving Humana $1,400 per month for nothing, unless we have something catastrophic happen. The answer is there for all to see: Canada, France, Germany, Denmark and every other civilized country on earth; yet, special interests control everything in our country. These people put their profits ahead of our healthcare. It has to end or else we will have to start a rebellion and settle accounts on the street.
18
Surely you are mistaken. Pres. Obama assured us our health care costs would go down He wouldn't lie about that would he?
Higher prices can blow a budget especially if the patient is on a fixed income, unemployed, or just plain unable to afford the increase. When people can't pay for medical care they don't get the treatments they need. The same is true if the insurance company makes getting the care too difficult with co-pays, narrow networks, high deductibles, etc. When we can't pay for our prescriptions we don't fill them or we stretch them by taking a lower dose than prescribed. All of this defeats the purpose of going to the doctor or the physical therapist or anything else we're supposed to do.
We do not have a real health care system in America. We have a wealth care system. We have a system that is failing all of us whether we're healthy or not. We should not have to choose between paying the premium for a health insurance policy and the rent, paying the deductible each year or paying the utilities for the month, or forgoing care altogether and hoping we're lucky for another year.
We might have the best doctors in the world but they are of no use to us if we can't see them because they're out of network, we can't cover the co-pay, or they aren't accepting insurance. It's time for our wealth care system to transition into a full medical care system that covers physical, mental, dental, and other issues. Doctors should not be allowed to opt out of accepting insurance. Pharmaceutical companies should not be able to overcharge patients.
11
Not always true that they don't get the care they need, probably not even most of the time do they go untreated. what will happen in such cases is they will get treated, then billed up the wazoo so they must spend the rest of their lives being hounded by their medical creditors or their surrogates, or medical debt farmers, paying every last nickel for their treatment. There are whole industries beyond the doctors getting rich in these situations.
I hope Dr. $ucce$$ is enjoying his Mercedes coup and suburban McMansion, what nachas he's giving mom and dad, such a nice boy!
Let's face it though, none of this would be possible without putting doctors through decades of educational hazing to justify the tanks of gold at the end of the journey. From pre-med to residencies (not to mention the path toward college admission) the process is deliberately made an excruciating grind not because it has to be. but because the salaries won't be justified unless the recipients go through a decades-long grind. It's exactly Iike "Survivor": excruciating Darwinian grind to separate out and anoint the winner, winner-take-all.
The medical career is the ultimate distillation of social-darwinist post-morality human capital ethic and worldview.
There is a big gap between the data "prices are higher" to the underlying cause(s) in the conclusions. Most readership here, just like Trump, prefer a twitter-size solution. Except here that solution is single payer. But, healthcare is complicated. Some of the causes for prices in the US include: profits taken by private payers, unhealthier population, costs of no evidence-based regulation including entities like the Joint Commission, distorted RVU-driven reimbursement system that values procedures more than other services, greater litigation risk, and simple greed.
For those enamored with a single payer system, please read the concurrent NYT story about a VA in Oregon. A payer is not a provider -- it is just a middleman. It is true that this middleman adds little value and is not even interested in better outcomes. What is needed is an alignment of payment with better outcomes of care. The problem is that the bureaucrats in big systems, private or state-run, always manage to make things worse rather than better.
5
The problem is that we get the worst of both worlds. We don't have a free market (as other pointed out, supply of doctors is severely restricted, no Medicare drug price negotiation allowed etc.). We don't have a government controlled system with caps and everything else either. And in all fairness single payer systems in other developed countries seem to work OK.
8
My child is Type 1 diabetic (commonly referred to as Juvenile Diabetes or T1D). It's an autoimmune disease that 0.5%-1% of the population will get at some point in their lives often before they become an adult. It has nothing to do with lifestyle choice and there's no mitigation possible through behavior, exercise, diet, etc.
As someone with T1D she requires insulin to live. It's as important to her as oxygen, water and food. Unless there's some cure in her lifetime she will ALWAYS need insulin.
The amazing thing about insulin is that thanks to Canadian university scientists we have been able to create it for humans since around 1920. The 1st patent was sold for $1 with the intent to keep it cheap for those that need it.
But that's not what happened.
Today three large pharma firms (Lilly, Sanofi, Novartis) control the insulin market. While they've improved it incrementally in the last few decades it's essentially not much different from the original bovine-based insulin of the '20s. And all three companies collude on pricing to keep it artificially high for US patients because they know people will die without it. In other words: because they can. A drug they can manufacture for about $2 a vial is $350 in the US and only in the US.
This is why costs are high in the USA. We're providing nothing but profits for shareholders. This money is not being used for innovation. Ask anyone with Type 1. Their routine and prospects are the same now as 30 years ago.
It's shameful.
64
My son was diagnosed with Type 1 in 1993 when he was age 9. Every doctor we encountered during his hospitalization told us "There will be a cure within this decade" to which my husband replied "No, there won't- too many people are making too much money off this." The doctors all protested and told us we were too cynical. But they still are and there is still no cure. It's beyond shameful- it is OBSCENE.
14
Hi
I am a Type 1 Diabetic here in the UK.
When first diagnosed as a diabetic (1990) as I had Private Health Insurance my consultant decided that I needed to attend a private hospital to show me how to inject - where I spent one night but the hospital charged my insurer for three days care so the cost bore no relation to the time spent.
It was subsequently decided that I might need just tablets as I might have been type 2.
They then decided I needed insulin after all but by that time my insurance had expired as diabetes is a chronic long term illness and I went to our publicly funded NHS (same consultant but different hospital LOL) where I then was shown how to take insulin by a specialist nurse on a half hour visit. So why had I needed three days as an inpatient when I was using insurance ?
I am a lawyer here and have never had to pay for my treatment since.
The moral is that if you put profit into anything there is an incentive to put money first- it is not rocket science.
There should be some sort of middle way
14
This is a perfect example of a medical intervention being low cost but having a high price. It's unconscionable.
7
This description matches my personal experience as a health policy analyst working in the Texas Legislature. If there is an attempt to control prices, you better believe the health care lobby will be aggressively opposed and will offer any argument available against the measure. I learned that individuals and groups are bad at assessing the benefit to society against the cost to their profession. It speaks to the selfishness of our society and left me extremely disappointed in those who swear to work in the interest of their patients.
10
Winston Churchill is credited as saying "Americans will always do the right thing once they have tried everything else." I figure that's how our health care system will eventually come to embrace single payer.
26
We need to go to single payer Medicare for all. Most of the USA knows this "no-brainer,' and all the insurance-pharma money in the world can't rewrite these facts -any more than the oil companies can rewrite the facts on climate change. Medicare doesn't have costly overhead - it's the opposite. Our own CBO has said so for over a decade already; i.e. opening an improved Medicare for all is "the most cost effective way to provide quality health care to every American."
When the Canadians started their excellent single payer system, Nixon was starting us on our disastrous course - with tens of millions now virtually shut out of the health care system altogether and 45k yearly dying as a result. But when the U.S. and Canada started out in these different directions, we were like health care twins. In only 35 years, however, Canadians and single payer were rapidly outpacing us in savings, costs and health care outcomes, while we skyrocketed in all the wrong directions. We have currently the highest infant mortality rate among wealthy nations. Our system is a threat - not an aide - to UHC systems elsewhere because as long as these racketeers are allowed to run amuck, they will try to get a foothold elsewhere. There's really no getting around what has to be done in the USA - facing the music, as far as the usefulness of these corporate life cycles are concerned (i.e. "no one can live forever" - even Aetna and Wellpoint) - and pulling the plug by opening the Medicare system to all.
19
I read that due to duplication of administrative costs (too many insurance companies and plans) and the accompanying health care bureaucracy, if we went to single payer, our cost would be on par with Europe. IOW: if we shaved of the one inefficiency that has NOTHING to do with patient care or payment to doctors and drug companies, we would be back to acceptable levels.
So, we just need to go to single payer. Simple.
A type of Medicare for all who do not get plans via work or want to pay for it on their own (rich people). This is how Germany does it.
Doctors stay private. Drug companies stay happy. Insurance industry is the only one affected and even they can stay in the game as data processing and management subcontractors plus continue to provide healthcare for industry and private rich people.
Basically, if we just made the ACA work as intended and make the single payer system a reality, healthcare would immediately drop in cost due to efficiency savings.
Metaphorically speaking, we have too many private fire departments. It is expensive and complex for no reason. My neighbor has no fire department. His house burns down, and my property values suffer. We need to make a fire department for the country. The equipment and truck makers will still make the gear for the same number of firemen! All our property, buildings, and lives will be just as safe—more safe—and it will be much cheaper.
9
I think this is a general problem in the US, not just in healthcare. Across industries as corporations get bigger, and as the finance sector has gotten more cutthroat, it seems that there’s been a shift from rewarding innovation to rewarding companies who figure out how to limit competition and profit from its lack.
6
In no way do I want to be defending the rising cost of health care but deriving the right conclusions from the data presented in a study is critical to a truthful analysis of this very important problem.
The main point as presented in the article is very misleading. The actual study lumps unit cost (per service) and the intensity of the service together as one factor called price. For example, diagnosing back pain with an MRI vs an x-ray is included in "price". Neither happens to be the right thing to do most of the time. This is very different than identifying the cost of an MRI from provider A as being much higher than provider B of equal quality and very different than saying that the cost of an MRI from provider A has increased by X% greater than general inflation over the past 10 years.
On the other hand, drug prices have increased very disproportionately even for the same medications over time. Intensity related increases would say for example, that the diabetes drugs that are currently being used are different and more expensive than the drugs that would have been used 10 years ago. In some diseases, that might have lead to better outcomes, in others, just increase costs without improved outcomes.
"Lowering price", meaning the unit cost or provider salaries, isn't the right conclusion from the data.
Health care is complicated- who knew? But at least let's be as "truthy" as we can.
5
Completely agree- Lets look at the whole picture not just the pieces people want to show you to make a point. Lets look at simple things- tort reform.. Obstetricians pay 140,000 a year in insurance in 2015 compared to 40,000 in 2002. They will cover these costs somewhere. Why does it cost 10 dollars to dispense an advil in a hospital. There are way too many questions. This article doesn't look at any underlying factors it just says cost...great reporting. This article should be titled a few guesses on why possibly we spend more than other countries. There are reasons why - but you will not find it here.
3
Find this article is missing another part of the story - those in other countries do NOT consume as much care. This article fails, like most when it comes to comparing the US HC to the rest of the world. Even Canada limits access to care and getting into the hospital with a chronic condition is next to impossible. However, one might ask 'why' are prices so high vs. just a few decades ago? Prices are a symptom - the real issue is that Congress under Clinton and Bush continued to expand third party mandates. Our county, unlike any other, gives power and money to countless intermediaries dictated by the Government as they implemented Hillary's ideas from the early 90s. The IDNs, HMOs, PPOs, and computer software companies walk away with a significant portion of our HC dollars. As do the insurance companies. But, let me ask you - if universal care is the panacea, why does everyone that have any money to spend, buy private insurance and come to the US for care other than a broken arm or other acute, cheap episode?
2
No one that I know of, including 8 members of my French family and 4 members of my American family, would choose to be treated for a serious disease in the US rather than in France. I live in the US and I am covered by medicare but I have worked in France (in medical care) and I would choose my French coverage for any serious (expensive) problem.
7
Limits access to care and getting into a hospital with a chronic condition is next to impossible....really.
To be honest their are waiting times for some procedures but the above comment is not even close to reality and closely mirrors the GOP talking points.
Please don't compare wait times for some in Canada to the horror show in the US where million of people would gladly wait in line for healthcare...there is only one problem they don't have any health insurance.
Yes we have problems in our health system...but one thing i can be sure of is when i get to the front of the line and produce my health card i will be treated.
3
First percent of GDP is not an appropriate measurement at all. Next we pay more for almost every person who works in the health care system. We have the most diverse and unhealthy population of any developed country. We have the most use of advanced methods and more drug addiction than anybody else. If this analysis does not include these factors it is "fake".
4
Why don't more of you come over to Europe for health procedures? In many countries, private sector procedures are much less expensive than you're paying in USA, and you can combine it with a vacation.
28
Alternatively, try Cuba.
One word, insurance. Doctors and hospitals can charge more because insurance companies pay for most of the services and not individuals. And insurance companies have little incentive to keep prices down (other than their profit) as they just raise premiums. And since most people get their insurance they their employer, they have little incentive to reduce prices. It's the employers who are caught in the middle but have little bargaining power and few options.
13
This is not entirely true. High deductible employer provided health plans were introduced precisely to make the cost visible to consumers. HDHP plans have been successful towards the goal of preventing consumers from overusing healthcare.
Not sure how to believe this article. The authors backtrack on everything they say in the last paragraph!
I would say it probably is prices - look at the average salary of health professionals a part of which of course accounts for their >50% health insurance. And this is true in general for wages across all professions.
Chicken or egg problem?
The innovation argument is non-sense. It is driven by a false impression that more fancy equipment and drugs are actually resulting in better care. Health care is about how you make people live better lives not how many fancy gizmos are used. And not about million-dollar executives pushing said gizmos.
20
I agree, just look and compare the outcomes in the differend inustrialized countries especially Canada and the European Countries. The statistics are readily available at the WHO website. Most of the aforementioned countries have better outcomes than the US. Take a look a longevity and infant death mortality.
4
Agreed. In other developed nations, there's plenty of medical innovation. What's even better? Once that innovation is found, everyone has access to its benefits. Not just the one-percent. We currently have the highest infant mortality rate among wealthy nations with 45K Americans dying yearly because they lack adequate access to the health care system. We are also global leaders in nearly 700k medical bankruptcies per year while our counterparts have zero plus none of the health ailments related to these highly stressful and economically debilitating situations. Pass single payer now!
3
The countries/regions that you mentioned have innovative medicine. Perhaps the differences could be attributed to better access to care for a greater proportion of the population, earlier intervention, culture, and diet to name just a few. Looking at statistics after stating your premise tends to bias one's conclusion.
How about some price and quality transparency for patient consumers? Patients should know how much services cost. Hospitals and clinics should be allowed to compete on price and quality. We have these metrics available. Federal law should allow them on a ‘menu’ of services for patients to easily compare. Let a little free market competition into the system and prices will fall. Throw in some common sense tort reform as well and prices would fall further. Neither would cost taxpayers an additional cent.
12
OK, I'll "shop around" when I'm having a heart attack, have just fractured my hip, just suffered a stroke...
C'mon, you can't be serious!
If you want to save taxpayers' money, allow Medicare to negotiate prices for pharmaceuticals. If you want to save taxpayers' money, prevent overpricing by dialysis clinics (dialysis costs many times more in the US than in Europe).
The "free market system" has been in place far too long in the US, it has proven time and time again that the prices will not fall, quite to the contrary.
14
The Health industry is way ahead of us all.
Fee for service isn't good enough for them. They are going for capitated payments, starting with the Medicare Advantage plans. Few Medicare beneficiaries know that Medicare sends them hundreds of dollars every month whether the consumer uses it or not. In my county, my 5-star plan gets $850 per month.
And by the way, every year their puppets in Congress sign a letter to CMS begging them not to reduce the capitation amount.
https://www.ahip.org/majority-of-senate-signs-bipartisan-letter-urging-c...
2
We should not overlook the insurance industry as well. There is a limit on their profit margins. Too high and it will invite competitors to undercut or regulators to act. Once the profit margin is set, the only way to grow the business is to increase overall healthcare spending.
1
The ACA includes language that requires health insurance companies to spend at least 80% of premium dollars on claims. It seems that there are already limits on health insurance companies profit margins.
3
In the ACA, and remember a lot of people work for companies that are self insured as well.
Happy New year!! Biogen has raised prices for their MS drugs - 3-6%
4
Never have so few given so little to so many while charging so much. This Emperor needs to be bathed and dressed. Any muckrakers out there?
8
Look up your federal, state or local civil servant at Follow the Money, then call them and tell them to stop taking this blood money!
https://www.followthemoney.org/show-me?d-cci=65,67,66,64,68&d-ccb=12...
2
After writing an Op-Ed full of data and references, the authors write a last paragraph that is pure speculation.
Wa' happened?
12
Could it possibly be greed? Geez, this is a hard one.
15
Recently during a meal with some relatives, the topic of contemporary college studenrs' career aspirations/paths came up. My sister-in-law & her mother casually mentioned the trend away from pre-med, toward finance, among high-achieving students in recent decades: "There's more money," both acknowledged approvingly, without a hint of irony, as of to say, "Well, they wouldn't be high-achieving if they weren't smart, & of course it's smart to go where the $ is; why not?"
Taken aback by their their candid cynicism-- dispensing with any pretense that doctors had ever had motives besides lucre, I asked whether such other motives existed. They said that in the generations before finance & tech became the dominant path to money, medicine (& implicitly, law, among the non-science crowd) was the best way. They denied non-pecuniary motives among doctors, simply considering it "smart" to go where the money is. "What's bad?" "Why shouldn't they?"
Every day I see more confirmation that we live in a values ----hole; bereft of any principles & ideals besides $ & sex, with this (a)moral scheme deeply penetrating all dimensions of society.
Well, what's my point in this sanctimonious rant? It's this: Not only are the professions dominated by greed & money-worship (an obvious fact); in our lucre-worshipping "human capital" society, those formerly stigmatized traits are the new "virtue," and it's considered naive to think/operate otherwise.
In a HUMAN CAPITAL society, greed succeeds.
33
Heck, when I went to college in the 70s, all the greediest and most money-oriented guys were pre-med. There were so many of them, they had to hold first-year Biology at 8 AM on Monday, Wednesday, and Friday to thin the crowd. They knocked most of the rest out with organic chemistry.
9
I took a macroeconomics course at SUNY, when the transition was in its early stage, close to 1990. It was exactly as you describe! MWF, 8am!
The blatantly cynical function of the course (ie., almost enturely NOT about any kind of learning) was demonstrated not only by the schedule, but the way the course actually worked: the material was presented by a young Asian lecturer who obviously knew very little English, with unintelligible pronunciation (especially 8am), and the course grade was based to an extreme extent on students -who, given the unintelligible "lectures", would be learning everything would be learning everything from the textbook- mustering the willpower to show up for attendance and not be docked (quite a siginifcant percent of the final grade) for an absence.
The course was exactly like those reality show Darwinian contests of willpower, stamina, and cunning that simulate, for viewer entertainment and catharsis, the realities of our post-moral "human capital" world... which is to say, the typical pre-med ethic and experience as well.
5
Guess you will now have to be treated by a dumbbell since all the "smart" guys are going into finance and tech.
Look at HR1215. It will reduce to almost zilch any malpractice payments. Already passed by the cretinous house. Write ,telegram, bicycle to your Senators.
4
To support it, why should lawyers or anybody get rich?
It is a monopoly stupid, when you gets sick where else do you go, the witch doctor? You are protected from monopolies by the government in all other parts of the economy except medical. That is why all the other first world countries have socialized medicine.
15
I'm a retired physician and know this issue from the inside. We have a "for-profit" healthcare system, except for the VA, Medicare, and Medicaid, and a few brave states like Maryland who control prices. Five years ago I was charging my patients $50 for a 15-20 minute follow-up visit but little rural Wisconsin Upland Health charges me $200. for the same service. I never meet my Medicare deductible, so I get stuck with the full charge. I pay $160/mo. for my Aetna supplemental and they pay nothing if Medicare doesn't. So, I'm pretty much screwed by the system I served for 40 years. I was never in it for the money, took care of a large segment of desperately poor folks, and live on my SS. Trust me, American docs are VERY POORLY TRAINED, mostly hate their jobs, and wish they'f gone to law school instead. Good luck finding one who'll be honest with you, but I know from long experience. We need a single payer NOT FOR PROFIT healthcare system and a vastly improved medical educational system. THE CORRUPTION IN OUR PHARMACEUTICAL INDUSTRY GOES WITHOUT SAYING. Good luck! HAPPY NEW YEAR!
213
Medicare deductible is less than 200, how any doctor lives on only social security (or needs to) is a very good question. If we had that single payer system many doctors would not participate, I sure would not if I was a doctor. Yes pharma needs reform.
2
Apparently, you are not the sort who should be considering medicine as a career. For some of us, it's not about the money. It's a spiritual calling. That's OK, my parents thought I was nuts, too.
2
Amen! The corruption in our pharmaceutical industry is rampant. 600% increase in Epi Pen prices just because they want to make more money, no innovation and the case with insulin and so many other drugs. Soon no one will be able to afford any of them.
11
I work in healthcare and have for over 30 years in public, private, Military and not-for-profit facilities large and small. The whole time there has been a continual push on containing health costs, but those squawking loudest are the ones making bank at the expense of everyone else.
We live in a time when the administrators of not-for-profit hospital systems in small cities pull down Million Dollar compensation. A time when health insurers put ever more restrictive rules on coverage, pay the hospitals less and yet are making record profits. When Pharma are charging rapacious prices for hundred year old Medicines sourced not in the high wage US, but in India and other low cost countries.
In the hospitals we see fewer licensed staff and a proliferation of managerial staff who all cost way more than a Nurse, Radiologic Technologist or Respiratory Therapist. More “suits” driving Audis telling the people with the training and license to work harder and with less.
The problem is greed and entrenched self interest- everyone else be damned. Why go into debt and spend years to become a Doctor when you can get a throwaway Health Care Administration degree and make more, keeping banker’s hours?
That is where we are, folks. Break out the pitchforks.
193
Yes the MBA in medicine are the biggest idiots. They are the ones who could not get into Investment Banking, consulting, hedge funds, Silicon Valley
3
Mention was made of additional cost. Just observing my wife's diabetics treatment, one can see much of the additional testing and frequency of visits are related to C-Y-A. My wife did the only thing available to her, switched physicians. In my state, the medical community has undue influence and the Legislature enacted protective tort reform claiming consumers would see lower costs. In reality the change had no long term impact on price increases.
There has to be a better solution. I'm ready to join the rest of western medicine and have a single payer system for the U.S..
9
My son just had a laprascopic appendectomy. He was in the hospital for maybe 15 hours. Did not eat a meal, used the bathroom once and no wheelchair to the exit. In the surgeon's words, very straightforward, took 15 minutes. Cost - $37K. At first I was speechless and then just outraged. And my son still owes the hospital $5K out of his own pocket. The system isn't just broken, it's dead.
257
Your out of pocket costs would have likely covered the full cost of the surgery and hospital stay in Canada.
8
We pay ridiculous sums of money, as individual Americans, in insurance premiums, deductibles and copays and, as the author points out, in aggregate as a nation and on a per capita basis as well. And then the research in the article points out that, basically, we are just being grossly overcharged for what we get compared to citizens of the rest of the world. And then the article also suggests that we not lower the prices or try to control them too much because we would upset the healthcare industry. This story is ridiculous. Americans are sicker than our counterparts in the rest of the developed world, our life expectancy is lower than the rest of the developed world and we get abysmally substandard healthcare at the highest price. Outrage, not nonchalance, should define any article written on this subject. To attempt to normalize the misery that is American healthcare is to provide a disservice to all Americans.
30
The health care industry is corrupt. A person without insurance will receive a much different bill for the same care than an insurance company pays for someone with one of their policies. Hospitals give insurance companies a huge discount.
16
Don’t expect any improvement in pricing drugs. The pharmaceutical industry has very effective lobbyists to bear down on wavering members of Congress. Another opportunity to dissapoint the American public.
12
Sometimes I wonder how these articles are allowed to be
printed!!
"Higher prices aren’t all bad for consumers. (WOW!!)
- Why not double the prices, then consumers will do doubly well.
"They probably lead to some increased innovation, which confers benefits to patients globally."
- No! The will innovate anyway because that's how you sell more products anyway - okay?
"Though it’s reasonable to push back on high health care prices, there may be a limit to how far we should."
- You want to put limits of push back on prices? Seriously?? Why? Why not push back on prices as far as you can??
47
Any discussion about the cost of healthcare in the US that does not include the obesity epidemic (which is unique to our country), the cost of medical school and malpractice insurance for physicians, and the “I want it now” attitude of the American patient population, is like diagnosing cancer in somebody by reading their palm. Utterly pointless.
7
You are incorrect about the obesity epidemic. It is emerging in India, parts of China and in islands like Samoa and Guam.
3
Fair points, except for cost of malpractice insurance, which is about 2% of total healthcare costs (from multiple sources, below is one). Doctors + hospitals account for about 60% of healthcare costs.
https://www.forbes.com/sites/rickungar/2010/09/07/the-true-cost-of-medic...
Why do we rank 37th in health care? We apparently get nothing for paying 2X as much.
14
Because the distribution of healthcare services in the USA is not a normal distribution - it is bi-modal - those with good employer sponsored insurance get service that would be the envy of any other National Heath System.
2
I suppose that it wouldn't be in the overall interest of the country that in order to make health care better, that it God forbid "upset a lot of people." Horrid.
6
Health care and guns, Americans will do nothing. Americans will spend billions playing policeman to the world before spending money on its citizens health.
11
Well, for one thing the federal government prohibits competition and negotiation. Did you know that the single largest purchaser of prescription drugs, the Medicare program, is PROHIBITED by federal law from negotiating lower prices with pharmaceutical companies? Gee, I wonder how that came to be. Perhaps pharma industry lobbying and "campaign donations" (aka BRIBES)? How absolutely insane is that? Can you imagine paying the same amount per item for 1 item as you pay for 1,000,000? That's just economic nonsense. The more you buy, the lower the price - EXCEPT for pharmaceuticals purchased by the taxpayer.
The whole system we have (which is actually a disease management system, not a health care system) is set up for private-sector profits first and foremost. Efficiency and good medical outcomes are much less important.
2
" ... either of these would be met with resistance from all those who directly benefit from high prices ... pretty much every other provider of health care in the United States." Scheming MBA's using our health care system to extort money from the society.
1
Profiting off health care delivery is the albatross keeping us from having a good national or state-based health care system.
The share value in the Health care delivery industrial complex has doubled since Obamacare started.
And it has the protecti0n of our civil servants.
https://www.followthemoney.org/show-me?d-cci=65,67,66,64,68&d-ccb=12...
1
Health care is as much a national security issue as defense...along with infrastructure, basic science research, education and public health. The GOP only thinks defense is necessary...and evidently making the rich much richer.
4
Isn't it better to put it in concrete terms people can understand instead of spending per capita? Here's one for instance, I believe the US outspends the rest of the First World Combined while having less than 1/2 of the population.
What's even worse is the US has among the shortest if not the shortest average lifespan and the lowest approval rating for healthcare despite outspending everyone else.
The ignorance of Americans does not help where most Americans think Canadians are dying at the hospital doors when Canadians live significantly longer on average than Americans.
6
And yet when the Premier of a province need heart surgery, he ran away from the Canadian system for our woeful hospitals - similarly for Adele and the British NHS.
1
The former Premier of Newfoundland is a millionaire many times over (estimated net worth of $180 million CAD). The Canadian system, with very few exceptions, treats everyone the same. It does not provide more luxurious surroundings for rich people. Therefore, some prefer to have their surgeries done in the US where they do not have to wait and can decide on a higher-level of personal service. The following article from the Toronto Star provides some insight on the Premier's personal choice. https://www.thestar.com/news/canada/2010/02/03/danny_millions_williams_h...
Reimbursements are too low. Malpractice costs are way too high. And patients want to much. I have worked abroad- I do not agree that patients in Europe and Canada get what we get. Medicare spending in the last 6 months of patient's lives is enormous, and that is a waste. We allow patients and families to dictate care- 95 year old grandma with dementia comatose in an ICU for months because families insist on "doing everything."
The bottom line is that everyone needs skin in the game- mandatory copays that cannot be insured away, even for medicaid patients. Pull the government out and let the market take care of it. Prices will come down.
5
Even if you don't "agree that patients in Europe and Canada don't get what we get", it doesn't change the fact that in Europe and Canada, the average life expectancy is longer, maternal and infant mortality are lower. And people do not go bankrupt paying for medical care.
Oh please, "pull the government out and let the market take care of it"? On what do you base your theory? Just on the occasional "95 year old grandma with dementia comatose in an ICU"? Perhaps instead physicians should be trained to spend time speaking to the families of those poor grandmas, explaining to them exactly why any further treatment is futile. But no, too many physicians are above that... Not to mention that such a conversation might ultimately be to the detriment of their own bottom line.
10
A bit curious that "NY Surgeon" doesn't think the profit motive of health care providers is a major factor, if at all (which was the point of the whole article). "NY Surgeon" would rather pull the plug on grandma than take a haircut on his $400k-$700k salary.
2
Although you strike me as an I-pay-my-own-way sort of he-man surgeon (I'm guessing orthopedic), who wouldn't touch government subsidization of your career with a ten foot pole, I'm seriously wondering if you completely managed to avoid any tax-supported training at any stage whatsover, undergrad through residency.
Most med students do fund their education by massive loans that take decades to pay off, but even then medical schools (obviously state schools most especially) virtually all rely on some government funding. In most cases, medical careers in the U.S. are impossible without at least some kind of direct or indirect government support.
"Get the government out" is a legitimate comment when, and only when, you can claim you built your career absolutely entirely free of government contribution. If you aren't 100% self-funded, and if your programs were also 100% free of government subsidy, then you can invite us to join you in market-worship.
4
Blame the higher cost on inability to negotiate drug prices, pay for service RVU systems, and medico-legal concerns.
1
When the Arbiter, (insurance companies) have a profitable interest, more than the involved parties (Hospitals and patients) in any transaction, it is seldom to find efficiency in the equation and thus the inflated costs. The entire system is rigged with artificial costs & pricing to keep the cartel of insurance companies in business! The entire system is so designed that any medical institution who doesn’t join with this insurance cartel have no chance to survive outside their ecosystem. Likewise, any individual who does not buy insurance has no legitimate option to receive a reasonable care. The whole system is so convoluted that it has become the biggest joke of our so called capitalist system!
1
I could have written a much shorter article:
"Americans value profits over actual health so costs have risen exponentially". That's it in a nutshell.
I am forever grateful to the gods who sent me from Wisconsin to New Zealand all those years ago. It means that when my failing kidneys finally give up, I will get good care without the stress of worrying how I will pay for it.
6
The Health industrial monster has become such a lucrative cash register for investors, that we are probably looking at another bailout for the Health sector and their investors.
2
If the primary benefit of ever-higher prices is "some increased innovation" perhaps we should consider a single-payer system, then directly pay for or incentivize innovations. We would probably still come out ahead. Since about half of health care spending is paid for already by government, it is a public policy issue and not a matter for (failed) capitalism 'competition' to set the prices. Single payer would do that while also ending the 'rationing by price' that prevails now. Those who can pay for health care, either by having insurance or being wealthy, are not necessarily those who need health care most. Unfortunately our policy makers (Congress) are firmly and deeply in the pockets of the health care lobby in all its manifestations - AMA, Big Pharma, insurers, hospital chains, and the political demagogues who cynically leverage health care 'freedom' for political leverage. Paul Ryan and Trump have insured that those who desire the 'freedom' to not buy health insurance can do so - while we who do pay responsibly take care of freeloaders required by law when the freeloaders inevitably need care. Single payer - everyone pays, everyone is covered, and costs go down (eventually). Every other developed nation has figured this out, but we persist in being obstinately ignorant.
2
A significant percentage of Americans pay neither taxes nor for healthcare. Many patients in US consume more healthcare resources than most other countries, take this from a physician that has worked in multiple countries. I wonder how much the authors of this piece are paid and how they justify their salaries. Everything in America is overblown and over bubbled at every level. Look at CEOs salaries, Wall Street, your plumber etc. It’s easy to go after physicians and talk about driving down the costs of healthcare when the hospital administrators, pharma industry and insurance companies make out like bandits. Articles like this quote some studies and scratch the surface of the thick crust of land lying over big cesspool or sinkhole. In addition no one is factoring teaching medical students and residents into the value mix. We are going to get a ringside view of how the greatest medical education system in the world that attracted people from all over gets unraveled in the coming years and we end up with sub par physicians to treat the next generation.
5
The elephant in the room? Healthcare insurance companies. "Middle men" making huge profits off of healthcare.
3
It's great to have a president and congress so concerned about the American people that they demand accountability from drug companies and doctors.
From Canada's National Post:
"Canadian doctors still make dramatically less than U.S. counterparts: study"
"Orthopedic surgeons in Canada make less than half the $440,000 average net income of colleagues in the States while doing more procedures ."
http://nationalpost.com/news/canada/canadian-doctors-still-make-dramatic...
From the NIH
"Income of medical doctors in Germany"
"In their first year, doctors will roughly get 4,000 Euro/month, and after 3-5 years this can grow to more than 5,000 Euro/month before tax (3,4). With additional training towards a specialist (Facharzt) a doctor can start in a university hospital at around 5,600 Euro/month, increasing to a maximum of less than 7,000 Euro/month in 12 years (3,4)."
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4426124
As an economist:
The US medical profession has been highly successful in restricting supplies (via internship slots) and keeping out foreign competition.
How ?
In 2017 , the AMA spent $17,445,000 on campaign contributions .
https://www.opensecrets.org/lobby/clientsum.php?id=D000000068
4
"Income of medical doctors in Germany"
You forgot to mention in Germany, medical students do not need to get an undergraduate degree before attending medical school, and that university students do not pay any tuition in Germany, hence young physicians have no medical school debts.
1
Yes, the pay of German doctors is very low. As a result, Germany is having trouble recruiting good doctors.
Here in the US, the average doctor makes $182.
Maybe somewhere in between would be good?
1
Don't blame US doc salaries on this mess...also, compare costs of medical school and influence of fellowship training in US compared to Canada and Germany - also see - https://www.forbes.com/sites/physiciansfoundation/2017/11/27/debunking-m...
For profit everything health related is the issue. In addition, the cost of Medical school and the cost of Nursing school must be added. R&D costs are inflated and probably triple counted, if you factor in the tax relief, etc.
It's all about money folks, not care
3
Ironically, one if the major drivers of tuition costs is healthcare costs. States can not afford both. If spending for health care goes up, tax funds available to support tuition go down leading to tuition cost increases leading to higher doctor charges leading to ... on and on and on
1
Because there is so much money to be made in specialty medicine, few doctors want to do family medicine. Here in the US, we can bypass our family doctor and go straight to a specialist. In most country, you have to see your GP who will then decide whether or not you need a specialist. That's one way to cut costs.
2
http://www.pnhp.org/news/2014/september/health-care-overhead-is-costing-...
1
It would be interesting to measure the impact of malpractice insurance on pricing in the US and globally. Do we sue doctors and hospitals more than patients in other countries? and, Do we win more and larger awards when we have been injured?
6
Not only is there much more suing (!) in the US, several factors which increase medical costs can be identified. First, the lawsuits often do not include any malpractice, but just an allegation by the plaintiff and lawyer...who so often care not a whit about honesty or justice, but pursue a big payday. The case is decided by a jury which has no medical expertise. It is not a true jury of one's peers (example, English law history, basis for ours...if an engineer's bridge falls down, his jury is six engineers with expertise in the field). In America, the lawyers have cooked the definition to mean six people chosen from a jury pool at random. Not only are they most often without expertise, those with expertise are eliminated in jury selection by the plaintiffs' lawyers. Whereas surely malpractice exists, often cases are brought by lawyers hoping to sway an uneducated jury into giving a big award if the patient has had a bad result, without any malpractice. Malpractice insurance premiums are doctor cost. Next: Doctors order what some would call unnecessary tests, defense for fear of a malpractice claim if the patient progresses to complications.
The lawyer faces no penalty except for lost time if the suit was phony and he loses.
The argument by lawyers that malpractice insurance is only a small percentage of medical costs is s a false one. Imagine a neurosurgeon paying $150K a year for insurance, compared with the Medicare reimbursement for operating on a brain tumor ($1,760).
When enumerating the costs of health care, shouldn't we include the costs of medical-related education: tuition, fees, and the interest on student loans.
How do those costs compare to those is other countries? They would seem to be a driver of any disparity in wage levels.
4
There are several papers describing in dismay the realization by doctors that they are so deeply in debt after training that they have made a bad financial decision (but the great majority are happy with their ability to help people, yet some think the debt burden and worries thereof outweigh it). Doctors, except for some elective specialties which rely not wholly on insurance reimbursement, such as plastic surgery and dermatology, have their fees set by the insurance company (Aetna, Anthem BlueX, United Heathcare). The insurance company owns the patient. The doctor must sign up with the insurance company to be reimbursed for any of their patients, and has no say in the low reimbursement. The worst payer is Medicaid, followed by Medicare...both of which often reimburse the doctor less than overhead costs for their treatment. So it is difficult for the doctor to pay back student loans with the pitiful reimbursement by the "medical industry," which means the non-doctors who make a living in this system, and make more money for their companies (yes, Medicare, too) by underpaying doctors. Also...our training programs are long, the earning years shorter than many other countries.
Sometimes I wonder what would happen if we suddenly switched to a cash-only system. You have to pay for health care like you have to pay for everything else. Much more critical analysis of the costs would occur and prices would drop.
What would happen is more poor people would die, and more people would die from preventable and maintainable diseases.
4
Virtually everyone is in their chosen profession to make as much money as they possibly can. This aspiration, I believe, trumps any degree of altruism, patriotism, service or humility. I also believe this is a rather recent development in the American psyche.
Within healthcare, the emergence of HMO's and boutique specialization, and the dearth of GP's or rural health care practitioners are just the most obvious bellwethers of financial motivation trumping societal needs.
1
What is your job, and how were you motivated by societal needs to select it, caring nothing for the financial reward?
HMOs were not designed by doctors, but by insurance companies. Boutique practices have come about because of the low reimbursement to doctors from insurance companies, which own the patients.
I decided to be a doctor before I entered elementary school. Even in college/premed, and also in medical school, making money was not on my mind. In fact, one of our professors showed that by age fifty, a bricklayer would have more money than a doctor. (fifty seemed pretty old to a 23 year old medical student)
Financial motivation is not the reason for the dearth of GPs or rural doctors.
1
To add fuel to the fire, doctors sometimes own the very testing facilities to which patients are being referred to. Thus, it's no surprise really that US patients have more extraneous things done to them. The fleecing of America continues under the guise of a 'free marketplace'.
4
There is no free marketplace in US healthcare. And the idea of doc's owning their own ancillary offices as the culprit is flawed. 25 years ago docs could own these services but much has been outlawed under the Stark Law with a few exceptions - this despite studies showing over-utilization with these ownership arrangements was not widespread...but the hospital assoc jumped on the idea and since that time, the majority of independent physicians have had to shed their services, have been driven from private practice, hospitals have bought them up the docs and their practices and captured a greater and greater share of the market and by the way, all the ancillary business that used to be in private hands - its now with your local hospital and is costing the public 30 to 40% more than that same service did when it was not a hospital outpatient service. And what have happen to healthcare costs in the last 25 years?...hmmm, just a coincidence I guess.
2
A simple fix is to require hospitals to publish their prices. If I knew that a knee replacement at hospital A cost 20k and 40k at hospital B then I could make an informed, rational decision, assuming they're comparable hospitals. Then my insurer should reward me with my smart decision making reduce my out of pocket expense. Hey, I just saved them 20k.
8
The importation of pharmaceuticals from low cost, quality reliable sources and medical tourism should be encouraged and incorporated into our system.
2
The studies pretty much show what has been my experience as a immigrant from a country with single payer. Go to the doctor with a minor ailment, and they are always recommending tests and treatment (that they can perform for a high fee, through insurance). Say you have chronic sinus blockage. In Canada, the doctor recommends a neti pot or otc allergy sinus spray, and the dr gets paid for the 15 minute appointment based on government set rates. In the US, the doctor recommends a "simple" surgery that s/he is pleased to perform in the office and run through insurance for $3500. They're always pushing MRIs (on site!) or mandated hearing tests from their on-staff audiologist with every ear infection (I've had 3 ENTS suggest that on the first visit). It took me 10 years to really figure it out, and to learn to say "no". "My son's ear no longer hurts, no more discharge and i've noticed his hearing seems back to normal. Do we really need to do a hearing test?" "AMA says pap smears are only needed every 2 years now. Do i really need to do it annually, as you are suggesting?" The doctors are pretty quick to concede when you actually ask. But most people don't think to challenge the doctor.
6
When considering the cost of US healthcare, it is important to remember that cost associated with insurance companies (billing, claim processing and submitting, and profits for said companies) accounts for 30% of the spend. There are legitimate criticisms for access in plans like those in Canada, but the billing and overhead costs are closer to 2%. Healthcare in the USA is close to 20% of GDP - if you want a massive stimulus program, eliminate private for profit insurance and free up the 6% of GDP (30% of 20%) associated with "overhead" for delivering healthcare.
11
There is a US plan that has low administrative overhead (~4% I think). It is called Medicare. Look at all the resistance to a 'Medicare for All' option... go figure.
5
Didn't you get the memo? Medicare for all would be government control of your health care!!! Some faceless government bureaucrat would choose your doctor, choose your medications, surgeries, run you past the death panel just like current Medicare, right? Oh, current Medicare doesn't work that way? I guess I got some GOP fake news.
Doctors and nurses in the US make twice as much as most other industrialized countries, and the pharmaceuticals here cost more because almost all of the R&D is recaptured in the US, while other countries get a free ride on development. This is not news.
So just cut the salaries of all of the nurses by 50% and the physicians by 50% and we will all be OK. That makes sense. Everyone will be happy....except for the people delivering care to you.
1
An additional cost in the U.S. is the multi-layered administration fees and the profit margins taken by the insurance companies
5
Carpenters make far more money per hour ($45) in my area than do nurses at the University of Vermont Medical Center where my daughter is an ICU nurse. Do YOU want the nurse taking care of you to make 50% less than now?
5
The people delivering care will still be filthy rich. A 50% pay cut for doctors will still have them making a fortune.
"more is done for patients during hospital stays and doctor visits, they’re charged more per service, or both."
Actually, more is done TO patients, in the form of extra testing, minor procedures, and other "billables". And what of the FDA and insurance companies? They have an agreement, in the form of an evolving document, a book that states the agreed upon "paybacks" of procedures, drugs, etc., by insurers to hospitals and physicians. THIS is where the fiscal blood is being drawn, and at an ever-increasing rate. We're a "for profit" patient farm, with no legislative protection. Frakt and Carroll have more work to do.
6
For-profit health care insurance companies are the problem.
Government run central payer health care is the solution, under which the health of the patient is the priority. In Canada the Provincial Government run central payer health care system is paid by income taxes which is PROGRESSIVE to the insured versus the present insurance company based system for health care in the US which is REGRESSIVE to the insured. It is regressive in that a given policy with identified benefits will have a set price and this price is to be paid by all persons whether they are rich or poor. As a result, the rich buy the Cadillac versions and the poor the Skateboard versions.
Also, and importantly, administration costs are much, much lower under the Provincial Government run central payer health care system under which most expenses are controlled through agreements with providers and are automatically approved with patients.
In contrast, under the present insurance company based system for health care in the US, these companies treat their customers like cash cows and their administration costs are much, much higher. This is because they spend much of their time doing battle with clients on costs and procedures … and they always prioritize and will only approve the lowest cost options keeping profits up and shareholders happy … but not the patient, who is not the priority !!!
19
I spent my career in health care and worked in the USA, Europe, Israel, India, Australia, Japan, Taiwan and briefly in other countries. A major cause of high prices not mentioned in the article are the prices charged by health care professionals in large part to pay for the debt incurred during their training. In France, where I lived for 13 years, college and medical education are paid for by the government and students qualify for their training and for their speciality by a system that trains enough specialists to take care of anticipated needs. Those needs are easy to establish because of the universal health care provided for everyone and that care is monitored for every use by the social security card that everyone has, even me and my family, as American citizens. I could go to any doctor, who put my card in their computer and the bill visit automatically is sent to Social Security and to my Insurance company and I would pay a small out of pocket amount, most of which was reimbursed. Only one of the four personal physicians I had had a secretary and that was for a 4 doctor group.
In the US, every doctor has not only a secretary but also a person who handles the payments system. The charge for the patient is sent by that person to another person, either in medicare and/or private insurance company. This process takes more than month to settle and can involve at least 6 people.
108
Doctors don’t set the prices. Insurance companies do and they have have plummeted for years. Millennial s are entering finance & tech for money. Not medicine.
1
Commenters here point out multiple discrepancies in this reportage. Not that the authors get it wrong. But pricing in and of itself is far from the dominant story here. Pricing incentives often drive high costs and over-usage--very much a vicious spiral--for drugs and procedures precisely _because_ they are high priced. Sorry, but doctors (too many specialists, not enough primary care) are partly responsible, and even moreso, hospital executives. See hcrenewal.blogspot.com for more on these issues. Maldistributed incentives and pricing structures. Too many middlemen with hands in the till (not CMS, which is efficient, but insurance companies and especially PBM companies. A sorry mess.
3
I didn't notice here the issue of rising pharmaceutical prices. My thyroid medicine, which I must take the remainder of my life, costs about twice what it did a couple of years ago. Ditto other medications that I take regularly. I will be switching to Costco because their regular prices are lower than my Part co-pays. I don't understand why, but I am grateful to have this option to lower my costs.
My friend buys Voltaren gel in Canada each summer, where it is sold over the counter at much lower prices than in the United States. I may do the same with other medications the next time I visit Canada.
We should not be paying as much as we do for the privilege of living in the United States.
8
I live in Germany and have been on dialysis for several years. In Germany, because I am privately insured, my dialysis costs about $270 per treatment (which is about 30% more than the semi-public insurance companies would pay).
I often vacation in the US. On previous trips I used a non-profit for dialysis, who charged about $500 per treatment. I am currently once again in the US, the non-profit didn't have a MWF slot for me, so I sought treatment at a for-profit dialysis center. They are charging me over $2000 per treatment. That is obscene. Had I known that in advance, I would never have let myself be treated there.
There are many reasons why American health care is far more expensive than anywhere else in the world. But the main reason is greed. It's nothing to be proud of!
54
The authors did not write about the impact on prices of a for-profit system. Neither did they describe the costs of high administrative overhead in the US system, due to regulatory burdens, and a fragmented financing system, including for-profit care. I work in the health care system. I just got an e-mail from a 'coding intelligence division', insuring that coding will lead to maximum payment. We have layers of administrative overhead that other, more sensible, systems do not encourage.
11
The ones who benefit from "high prices" are NOT "physicians, hospitals, pharmaceutical companies — and pretty much every other provider of health care in the United States." It's the insurance companies who stingily dole out payments to the actual ones who deliver care while keeping their profits and executive compensation salaries intact at record levels.
24
This is an incredibly wrong headed comment. First, much of the insurance system is dominated by not for profit companies such as many Blue Cross organizations, Kaiser and others. Second, insurance company margins are an infinitesimal portion of the entire healthcare spend in this country. Take the insurance company margins totally out of the picture – and forget for purposes of this that Medicare and Medicaid have costs of doing business as well. Then sit back and watch what happens to healthcare spending. The authors of the article got it right. Except at the end where they recommend doing little or nothing to address the cost issue.
4
Not-for-profit insurance companies? YOu ARE joking! Insurance adds 30% to our costs, as has been found over and over, as well as layers of bureaucracy that are just unnecessary. GET RID OF INSURANCE INDUSTRIES!!!
1
Doctors' salaries have skyrocketed in the last decade. As goes their pay, so goes everyone's contribution to their lifestyle.
1
What happened? We all decided we want to be as rich as possible, so now everything is expensive, and exploitable. Nothing else matters as much.
5
LOWER prices can also stimulate innovation. An example from Japan: the prices for patient MRIs were fixed. Doctors said, we can't afford the machines if we have to provide the images at such a low price. The pressured the manufacturers, and, voilá, the manufacturers came out with lower-priced machines. This is one example from T.R. Reid's brilliant book, The Healing of America, which is a detailed account of how other nations provide more for less.
Another comment on "innovation": the reality is that most of the health care people need is not high tech innovation. It's access to doctors when they're sick, to preventive care, to accident care and routine surgeries. The high cost of health care is a barrier to all that, and the remedy is a restructuring of the economics of health care.
If some big money-makers in the industry are "upset," let them be upset. It's not supposed to be about them; it's about the rest of us.
14
Prices of the insurance industry middlemen - that is all!!! I just suffered renal failure from kidney stones, a new thing for me, and the gyrations to get me to a hospital in my health plan, to find out how I am supposed to get covered for second half of a two part procedure - it is absolutely ridiculous, obscure, irritating, and EXPENSIVE. How to get rid of these parasitic insurers is the real problem - we must rise up and declare we want single payer, insurance industry GO HOME, find some honest work!
86
My nephew recently completed his residency (DMD) and is saddled with over $300M is student loans for his schooling, primarily his dental school (undergrad was covered by his academic scholarships). Over Christmas dinner he informed us that his current monthly payment is almost $4,000 per month. He is now working for 2 dental practices. That is a serious debt load for a 26 year old. How many other countries saddle kids with that kind of debt?
9
This article is about the high cost of medical care, not dental. At least dentists tell you how much the services they offer cost before work is done. With that said, dental work is very expensive which is why there is a glut of them in affluent areas like here on Long Island.
4
300 Million in student loans?
1
It is outrageous, and maybe that's the reason very few dentists accept patients' insurance and charge high fees for their services.
2
The US spends more on everything than other nations. The reason for that is we have much more money than other nations.
Several countries with higher or similar per capita GDP levels, including Norway, Ireland, Iceland, Switzerland, Australia, Austria and Sweden spend substantially less per capita on healthcare and have better health outcomes than the USA
20
Ayn Rand herself collected Social Security and Medicare.
It has been argued that Ayn's receipt of these benefits were not inconsistent with her ideology since she was just obtaining a return on her investments, that is, her contributions to these government-run "entitlement programs."
If that is the case, then the Randian economists and politicians who use her eco-politico views to condemn these programs (or future programs like them) are misrepresenting her own pragmatic philosophy . . .
14
The free market would work wonders for health care, if only the government would get out of the way. We're in this mess because the government gives a tax preference to health care plans, and these plans hide the prices of services from consumers.
We should revert to having major medical insurance and paying for the smaller expenses, doctor visits, and procedures out of pocket. That way, prices would be published, and consumers could comparison shop.
2
Mess was there before the Government got involved, that's why the Government involvement became necessary, otherwise third of population could not get any medical care. Knowing prices, although good step, is not going to solve the problem of high prices. Free market without regulations always ends up in monopolies that dictate the prices.
4
The "free markets" are what got us into this mess in the first place. We need government to step in and protect us from the carnage of the markets.
2
"The free market would work wonders for health care, if only the government would get out of the way. "
Then why is health care better and cheaper in countries like Canada and France where the government is more heavily involved than in the US?
10
Having worked in the industry for most of my career, negotiating costs on behalf of patients and institutions, allow an observation. Medical device and drug manufacturers are largely publicly owned and their primary reason for existence is to increase their share prices every quarter, innovation is simply a means to that end. In their view, failure to feed Wall Street is not an option and raising prices is often the only alternative once their products achieve market saturation. Want to rescue American healthcare? Breaking this slavish chain to shareholders would be a quantum leap in the right direction. Of course in this administration ANY regulation of business is a Federal offense.
65
Why do articles and commentary on "health care costs" always omit (or at best grossly slight) the health care that each of us provides for our self. Or indirectly partake via health clubs, fitness centers, and other recreation and physical activities.
Clearly, how we care for our own health and fitness determines outcomes as much or more than the formal "health care" system. Indeed, direct medical expenses run so high to a large degree because people care so little for personal effort to maintain health and fitness.
I am 73, run 30-40 miles per week (as I have for the past 40 years), maintain my weight at 142#, 30" waist--same as my college freshman days.
I am that to date I have not suffered any medical expenses for hospitals, pharmaceuticals, doctors' visits, etc. Why no burden to the medical expense system? Personal responsibility and good luck. If expenses were incurred only by those who experience bad luck, medical costs would plummet.
Take care of your own health and fitness, use the system for those accidents and illnesses that fate can sometime cast upon us.
7
They may plummeting for whose with good luck, but they still would be high for whose who has bad luck, and that is not a small part of population
3
I am doing that. It does not work very well. I pay thirteen grand a year in "insurance" for a system I don't even use.
Any other ideas?
1
You and Lance miss the point. Our system costs would plummet via more personal effort to maintain health and fitness, thus all of us would pay far less in insurance (whether provided by government or the private sector.
If personal care prevail, Lance would not spend anywhere near $13,000 a year in health insurance premiums.
Of course its the prices. Another word for it is profit. When a subset of the population is able to profit off of other people, it is very hard to change the system. Everytime an article on healthcare is printed, a number of people come out discussing single payer. However:
The current system rewards a lot of people, all of whom will fight tooth and nail against any changes to it - be it the insurance companies, pharmaceutical companies, large hospital corporations, diagnostic manufacturers, and even many physicians.
As long as profit continues to be the defining motive, nothing will change.
17
A few years back, I had a very comprehensive, generous health insurance plan I paid for myself ( I am self-employed); it wasn't cheap by any means, but I was content with it. While under this coverage, I went to my local hospital ER with chest pains. I was subjected to all manner of test for hours and hours. Stress tests, ekg, xray, etc. I was seen by at least 4 different doctors. Everything was fine and all test results were negative. I was held until 5pm next day and when I was about to leave two different doctors came in to "release" me and read my chart and wish me well. Out of curiosity, I requested from my insurer a copy of the charges for my care, which totaled over 9k, inclusive. Each of the doctors billed me for showing up. It was a free (or "fee") for-all. By keeping me to 5pm they managed to whack my insurer for another day, and the two docs who said goodbye to me at the end billed almost 1000 for their perhaps 10 minutes of time.
27
The irony is over insured people encounter more medical mistakes and errors. They are put not only through more tests but unnecessary procedures including surgeries.
7
Usually we jail criminals instead of paying them. Too many doctors are criminals.Hard to believe that we can't stop them.
2
The docs may have spent 10 minutes with you but likely spent considerable time before that reviewing your records, tests, etc. And if you did have a heart attack, you'd be grateful that the ER was there 24/7/365 to take care of you.
1
Our very high per capita health care spending certainly has been associated with high prices. So why hasn't market competition (competing private health plans) or government price controls (Medicare and Medicaid) controlled prices? Simply it is what is built into those prices that is unique in the United States - our profoundly wasteful administrative excesses. Ratcheting down prices either through the market or through regulation would not change our fragmented, dysfunctional financing infrastructure with all of its waste and would result in intolerable underfunding of the actual health care delivery system.
Frakt and Carroll suggest that an all-payer system might work, but that would fall short since most of the dysfunctions of the current system would remain in place. On the other hand, a well-designed single payer system (an improved Medicare for all) would recover close to half a trillion dollars that is wasted on administration and other excesses.
It is likely that prices would be reduced for health care professionals and facilities, but only by the savings in administrative excesses that would no longer be required. The net income for the health care delivery system would remain about the same.
It has been about fifteen years since Anderson, Reinhardt and their colleagues told us, "It's the prices, stupid." We really are pretty stupid to have wasted trillions of dollars in administrative excesses since that time.
7
The truth is, nearly all this money goes to salaries. Commenters here may rail at insurance companies, but the bulk of the money that goes to insurance companies is paid out in salaries to insurance company employees.
Here in the US, we have about 900,000 doctors, 2.9 million nurses, 500,000 health insurance company employees, 800,000 pharmaceutical company employees, etc, etc. Very few of them are living in poverty, and many are quite well-off.
Cutting costs would involve cutting both the headcount and the average salary. There is no other way around it, that's where 95% of the money is going. This would be very painful, and would involve lots of fighting and complaining.
So if you think the tax reform bill of 2017 was unfair, well, this would be far worse. Job loss and serious cuts in income would throw a lot of people and institutions into bankruptcy.
3
Jonathan, I believe you're correct re: the human capital employed by the U.S. healthcare "industry". Would be interesting to see how many total employees are employed by, or attached to, the NIH for comparison.
1
it always amazes me, how people worry about poor doctors or insurance agents but nobody cares about miners or retail workers whose suffering from unemployment is much bigger because they didn't have big salaries to start with
2
@yulia - I am not 'worried' about them. I am telling you that they are numerous, wealthy, powerful, and have enormous political influence.
Price regulation "would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies — and pretty much every other provider of health care in the United States."
Agreed, but good government necessitates sound public policy. Should our health care policies be based on promoting special interests or doing the greatest good for the greatest number of Americans? The question answers itself.
A government that governs least does not govern well.
2
If you look at state salaries on the web, the 2 highest paid professions are usually state-university football coaches and state-university doctors...many of whom make in excess of $1 million annually.
Where are all the doctors who don't need to drive a porsche? I get that they need to pay back their med school loans, but it seems to me that as a profession, American doctors are living high off the hog with little regard for the fact that poor or even middle-class families cannot afford their services.
Remember the hippocratic oath? (I will not over-treat; I will remember that I remain a member of society, with special obligations to all my fellow human beings; etc). I don't remember the part about "I will charge as much as I can get away with."
4
Medical schools should be free to all qualified students. Healthcare costs should reflect this education, and doctors won't be indebted for their years of training. Cheaper in the long run, and eliminates those who are in it just for the buck. Australia provides free medical schools to future doctors, but then being a doctor in Australia is not going to make one necessarily rich. It's more of high status in terms of accomplishments and contribution to society.
11
Working in disability law I see that healthcare has transformed into more "medication management " than anything else. People in the prime of life on a dozen medications, some of them prescribed to counter the side effects from other meds. Providers, (seeing more NP, RN, and PA than MD/DO providing direct care) are so pressed for time by our absurd insurance system less time is left for actual patient care. It's easier to just write a script and send them on their way. That doesn't work, increase the dose or write another.
A big aspect of the current opioid addiction epidemic was chronic pain patients. Less addictive forms of pain relief such as injections are limited by most insurance. Say 3 a year, but the relief only lasts for several weeks at a time. If the govt had not started prosecuting pill mills and putting limits on prescribing narcotics would that have changed? Nope. Because now patients just have a hard time getting both medications for legitimately crippling pain or more expensive, but effective, and non addictive alternative treatments like PT, accupuncture, injections and nerve blocks, spinal cord stimulator implants. In a for profit system health will always be second to profit.
7
The best solution is found in a national improved ‘Medicare for All’ program that removes financial barriers( premiums, co-pays, deductibles, co-insurance) to dental & medical care. A single payer, universal health insurance program will save enough on administrative overhead, & by also eliminating immense private health insurance company profiteering, to provide full, 100% comprehensive coverage to all the uninsured and upgrade coverage for everyone else while requiring no increase in total health spending. It would restore free choice of clinician, dentist, physician, mental health professional and hospital to all Americans and give access to every resident of the U.S. All dental & medical bills for covered services would generally be eliminated at the point of service (the dentist/doctor’s office, clinic or hospital), & replaced with full first dollar, 100% health insurance coverage for outpatient and inpatient medical care as well as rehabilitation, mental health care, long-term care, dental services, and prescription drugs. ‘Medicare for All’ improves on traditional Medicare’s benefits and expands coverage to Americans of any age.
Ask your member of Congress to strongly support the “Expanded & Improved Medicare for All Act”, H.R.676
See full text: https://www.congress.gov/115/bills/hr676/BILLS-115hr676ih.pdf
8
Unless Congress takes responsibility for this unholy scandal and begins bargaining with the drug companies on a national scale, like every other advanced country does, no kind of universal healthcare system will be possible. Add to that, Congress allowing providers to drop in on procedures when they are not covered by the patients insurance and then billing the patient directly. Unless Congress is going to take responsibility for the more than one trillion dollars that Americans pay for healthcare, compared to the other advanced countries, universal healthcare is a pipe dream.
2
Yet again, the NYT writers shield its investor readers from their complicity with the costs of health care in our country.
The market cap for the Health Industrial monster has doubled since Obamacare was enacted. Health has become the favorite playground for hedge funders and investors who want a quick source of profit.
Profit first, Care last??
How about a follow-up on how much Health Profiting goes in the US compared to other civilized countries???
4
A simple solution would be a mandated price list for health care goods and services pegged at an average of the prices paid for the same goods and services by the health services of the Western European countries, Canada and Australia. Of course, that won't happen here for the same reason that we refuse to adopt the world standard metric system of weights and measures. We are the "mandarin"nation of the 21st century, a society frozen in the traditional ways of the past.
8
I'd add that the benefit of a single payer system is the collective buying power of a country's population, when purchasing drugs, pharmaceuticals and resources.
Given the American system essentially functions on a case by case basis, it's no wonder everything is so expensive.
7
Our capitalist nation tends to put a price, or a value, on everything. This includes the value of a human being.
Health care providers literally do cost/benefit analyses to determine the healthcare treatment of a human being, depending on age, social status and cost of treatment.
The value of a human life, to the individual, to their families, their contribution to society, to the world, their worth on a philosophical level is not factored in. And this is a number that is more in the realm of philosophy than goods and services.
So we end up with HMOs, operating for profit, not for patients. We have legislators who vote to punish poor and middle class Americans with high taxes, then, reduce their Medicaid and Social Security coverage.
These entities, HMOs and Congress, clearly place a low value on human life, and embrace profit and dividends.
Those who work in the healthcare system are somewhat trapped -- doctors cannot offer care that is available because' the HMO won't pay for it, nurses are overworked and underpaid, yet the CEOs of these same organizations are wealthy, their investors support them, and dividends, on the lower side, are consistent, as people always need health care.
Our Constitution does uphold the General Welfare, which would seem to speak to life-supporting services. I think our legislators, all wealthy, have lost touch with the Constitution, the Declaration of Independence, the poor and middle class, and the value of human life.
7
Nurses are underpaid in the US???? A self-employed nurse in Northern California makes over 30% more on average than a French physician with a PhD (who had to study 9 to 12 years after high school). How much nurses make in the US is also part of the problem, just like how much physicians, lab technicians, PTs, hospital administrators etc make. Almost everybody involved in the US healthcare system is living high off the hog. As long as Americans do not rebel against this institutionalized extortion scheme, thre will be no hope for a fairer healthcare system.
3
Perhaps I stated my meaning incorrectly. While the pay is adequate, nursing teams are severely understaffed. Foreign nurses now supply much of the care for emergency rooms. Staff turnover is at an all-time high, due to exhaustion. Nurses cannot provide the care they've been trained to give, due to HMO protocols and limitations. For example, one nurse's patient had a terrible nosebleed on her shift and a doctor could not be found. So she administered typical anti-nosebleed treatment, which worked, but got in trouble for it for not following protocol. Since she could not locate a doctor, by phone or in the hospital, was she supposed to let the patient continue to bleed?
This from U.S. World and News Report March, 2017, Becker's Hospital Review, May 2017, and Healthline September, 2016.
Those who are willing to follow the HMO rules of treatment, and not effectively treat patients, are those who hang on to their jobs longest, but they have to go against much of the ethical treatment rules they were taught in school to follow.
I would say certain administrators and CEOs are indeed living high on the hog, as you say, but not the doctors, nurses, physical therapists, etc.
Oh, come, come. Use a little common sense. Before WWII, Americans had better overall health care for relatively less cost than other nations. Then, as a direct result draconian WWII taxation and regulations of industry and Americans' lives in general, who pays for health care was shifted from individuals to third parites, and the free-market for health care was gradually replaced by a government-managed system. Competition--the critical component and stern free-market regulator--was banished from medicine. Costs exploded. The government has no more business in health care than it does in religion.
1
Ned, the government (Congress) manages health care for the industry, and deregulates for the free-market. True government managed systems like the VA and Medicare provide better service at lower costs.
7
Costs have doubled against countries with much more government involvement. The free-market failure is no more blatantly visible than in the healthcare sector.
2
See a more recent short article by Uwe Reinhardt about where the health care dollar goes. UWAA surprised how much goes to the billing departments. One side trying to get more, the other side trying to pay less. Also American MDs spend 20% of time on administration. Much more than Canada .
Also estimates that one third of money spent in Us is wasted.
Considering the vast sums involved you would think conservatives would be interested in cost cutting and efficiency.
Thé institute of medicine made suggestions for helping with this 5 years ago.
11
On the way to single payer, transparency in prices would help. Where's the disruptive technology when you need it?
4
High prices are the "cause" of high health care costs? NO, the "system," managed by and for the healthcare oligarchs - insurance companies, big pharma, hospital chains, some doctors - have the market and political power to charge obscene prices. To oppose the power of their monopoly, you need a monopsony: a system where the state is the single buyer (Congress has passed and renewed anti-monopsony laws!). Profits have absolutely no place in any health care system. Japanese doctors are paid little but are revered by the population.
14
Teachers are revered in Japan as well. Respect for critical professions mades a difference.
2
I was hopeful when I saw this headline for a true, in-depth analysis of what is driving pricing inflation in the overall US healthcare system. And then I read the article. At what point does the NYT get back to writing well researched, multi-point of view articles?
A number of the comments start to tease out elements driving cost, but I would have expected the authors to delve into these elements as well as looking at the JAMA study. What is the cost of healthcare related litigation during this same time frame? How much does pharma spend on R&D? What have the salary trends been for healthcare providers (doctors, nurses, EMTs, administrators, etc.). All of those elements are factors in driving pricing, yet none are mentioned in this article.
7
Here is the trend for doctors:
https://www.medscape.com/slideshow/compensation-2017-overview-6008547#3
From an average salary of $206K in 2011 to 294K in 2017. Not bad.
2
beacon The article is summarizing the conclusions of reports comparing consumption & spending with that of other countries. That's all it purports to do. It's clear that U.S. doctors & hospitals charge more than other first world countries. (And we ALL know that their meds cost less.)
Whatever the actual reasons for it, the conclusion is a cold hard fact that you don't want to hear: in other countries, all providers --doctors, hospitals, nurses, insurance companies, pharma -- do it for less than in the U.S. without shooting up their parliaments or emigrating in droves. Suck it up.
2
Cost of litigation a bit over 2% of total healthcare costs. Not zero, but very small. Here is one source:
https://www.forbes.com/sites/rickungar/2010/09/07/the-true-cost-of-medic...
We need a single payer system. People should not be dying because they can't afford their meds or to seek care.
19
A thug confronted me in a dark alley, demanded, "Your money or your life!"
I gave him all I had in my wallet.
He graciously let me go, saying, "I could have become a medical administrator, but this is a lot easier."
12
For the same reason students are breaking their necks to hold an A+ GPA and get accepted into medical school and become wealthy.
4
Little do they realize that most will just be run ragged, loaded up with patients and have little time for each--unless they can gain the reputation to become a boutique doctor, or can afford their own practice.
2
Why is there never any debate on salaries of health care providers? If salaries come down, pressure to lower education and training costs come down.
Many other professions go into the same amount of debt for far lower salaries (Occupational Therapists, most lawyers, Physical Therapists, Clinical Psychologists, etc.) Getting a doctorate is expensive. Paying for school can be done even if you make only $100,000 a year for many years after graduating. Becoming an M.D., or specialist should not be a guarantee to a luxury lifestyle.
Providers should be able to make that if they own a business, not as salaried employee of a nonprofit (religious affiliated hospital or university).
When a business needs to cut costs, facilities and salaries are the first place to cut. I have never seen an analysis that shows lowering drug prices would lower overall healthcare costs a significant level. Salaries, I bet would. However, the AMA keeps us talking about other things like drugs. They are a very effective trade association in this regard.
8
The AMA also limits the number of doctors who are trained in this country. Low supply, high demand = $$$$.
4
In many articles we read about healthcare where price of care comes out as culprit, oftentimes the comparisons are based on "chargemaster" (US) compared to actual bills (abroad).
Chargemaster are sort of artificial prices perhaps paid only by those without a third party payer like medicare/medicaid or insurance. There is no rhyme or reason for how these are set. All that happens to these is they increase handsomely each year.
It would be interesting to know how US prices compare to the rest of the world on Medicare, on Medicaid and on Insured health plans
2
This is a valid remark. However even at discounted (real rates) virtually all services and medication in the US are a lot more expensive than in western Europe (I know because I have dual French American citizenship)? Sometimes the difference is obscene, like how much MDs or hospital administrators make in the US or how much some medications cost (one personal example: 30-year-old generic drug; cost per month in the US: $45, in France: $2) Still not convinced? spend a couple of years in France or Germany. When you get back to the US, you will view anybobdy involved in healthcare as an extortionist.
6
Just look at how high the profits are for pharmaceutical companies. That proves that the skyrocket prices we are paying for prescription drugs are not going just toward innovation.
5
Having spent a good part of my career in health care and having been heavily involved in the introduction of innovations such as MRI, I have often wondered whether I am part of the problem or part of the solution in health care costs. The track record is fairly clear, however. Most of the major new modalities in imaging were either invented or developed in the US. Most of the innovative new drugs are developed here and then find their way into other markets, albeit at substantially lower prices. And the vast majority of profits in health care are generated in the US. I never imagined that I would say this, but we need to throw out the current system before it bankrupts the country. What other market forbids price negotiation with the government (as we do with Medicare and drug pricing) and competition across state lines (as we do with health insurance)? We have completely lost our perspective on health care.
107
And speaking of high tech imaging machines, I went to see an internist for a problem that had a low tech diagnostic machine but the first thing out of his mouth was CAT scan. I asked for the low tech, saying if he was not satisfied with the result, we could go to more expensive equipment. But I never went back because after the logical possible cause was elimated by low tech, it was clear that others would not be diagnosed by a CAT scan. How many times have you heard people say they were given an MRI and CAT scan and nothing was found? How many of those expensive machines are needed? Are they being over-used to pay for excess equipment?
Testing is now taking the place of real doctoring, and probably because the insurer rates mean their salaries can only be maintained at high levels by seeing many patients. Hand them a test Rx and they are out the door in no time.
Of course the insurers know what is going on so their payments are designed so less is paid for and patients are now stuck with a lot of bills, even with what was supposed to be good insurance.
We need a better system, but what I am seeing is whenever anyone's fiefdom is threatening, legislators mostly back down on any changes.
13
medicare reimburses all of my medical costs (other than prescriptions) at a rate less than half of what my prior insurance (provided by the school district) paid. Most docs and hospitals accept it, because the Medicare rates are calculated to equal THE ACTUAL COST OF PROVIDING SERVICE. If we had single payer, medical costs would drop nearly in half.
36
The other issue is that we subsidize the rest of the global market. Price fixes in Europe have driven companies to expand prices domestically to offset the lower margin environment. Basically, we are paying so Europe can enjoy moderately low drug prices. This environment will continue until we pass laws to counter act it. But all of that isn't the real issue, which is the whole medical system is flawed with a over reliance on drugs and a under reliance on diet and exercise. If we put as much money into sustainable agriculture and subsidized it for the mass population we would see huge drops in junk food induced disease. But we won't because how can our current system sustain itself if people aren't popping pills like candy?
6
I had a thoughtful discussion with a retired heart surgeon. He admires the Canadian system - and believes that only by getting profit out of the US healthcare system - private hospitals, market-rate drugs, and pay-to-play medical care - will American health improve.
25
Also, addressing the 80% of health issues that are life-style related should improve American health overall, starting with modest changes to diet and exercise.
While this article zoomed in on price as the culprit, there is no mention of cost, which is the other critical element in any economic analysis. The difference between price and cost is profit, and that metric is also not mentioned. It's likely that the cost of American healthcare delivery is higher than elsewhere, thereby driving up the price paid for service. Another study needs to delve into the cost side, as managing cost will be the solution to higher prices.
4
That does not necessarily apply to the medical system, where the bulk of the costs are salaries. A 'non-profit' hospital that charges huge prices may indeed not make a profit, if it pays out huge salaries to everyone who works there.
On the other hand, capital costs have to be paid. If you borrow $400 million to put up a new hospital, then you will be paying interest to capitalists of some sort. They won't loan you the money if you don't.
Non-profit hospitals can direct profits to salaries and building costs (and probably equipment). There's no reason not to charge the patient excessively. Almost forty years ago when interviewed by a private university's hospital comptroller, I was told that the clinic was the "loss leader." What for? To funnel patients into the hospital where we make the real money. That clinic did have constant rounds of residents, so served another purpose as well.
duh! For profit insurance companies and for profit hospitals (including those called not for profit) and for profit pharmaceutical companies and, of course, medical professionals who want more $ are all getting more. Our system has this built-in, and there is no reigning it in. Medical costs can be controlled, but only if the profit motive is also controlled. I would also argue that high prices do not lead to increased innovation - except where a procedure or new medication can result in higher profits for the producer. Thus, the new medications we see advertised on TV are still under copyright protection and are very expensive. It's all about pursuit of profit in the health industry today, and in the foreseeable future. You can get the best medical care in the world in the U.S. - if you have the money.
8
The best for acute medical issues, but not for chronic health problems, many of which can be addressed by lifestyle changes, not excessive medication.
1
How about the 20% surcharge that we pay so as to inject the insurance companies (the only way to even pretend to use "the market" in what is, really a public good), in contrast to Medicare's 3% to, say, 6% or 7% overhead. And, by the way, outcomes in the US are far below just about every other country that has stop lights--at twice the price. Really smart!
7
Can you explain what the 20% surcharge is and how it's implemented? I haven't heard of that one. Thanks
So where is the 'magic of the free market', which should result in better care at lower prices? The findings on why health care costs so much in the US are just another indicator of 'capitalism for the poor, socialism for the rich', and there is nothing that market fundamentalists have to say that will change the outcome. 'Capitalism for the poor and socialism for the rich' is just another way of saying that in the US we have corrupt system of government, regardless of who obeys what laws, as lobbyists have undue influence which is reflected in their ability to have legislation passed that increases their profits at the expense of the middle and working class. We obviously have a plutocracy running the country, regardless of what others may say, and the dramatic increase in income and wealth inequality is evidence of the fact.
Both parties have supported and continue to enable the concentration of wealth, in this case in the form of health care. It is just another way to 'mine' and extract wealth primarily for the benefit of the few.
12
I guess a lot of people are happy about the stock price increases and don't worry too much about the implications for the health of our society. A classic case of market failure due to negative externalities.
4
There is no price transparency in medical care. Putting aside an emergency visit to the hospital, every provider of medical services should have their prices posted. If you go to the dentist and find you need a crown, you will be given a complete list of the cost before any work is done. Medicine should be no different; especially since so many now have high deductible medical plans.
9
Advances in medicine come with costs - some are worth the costs and some where you improve Quantity but not quality - meaning you live longer but not better. Treatment of Hepatitis C costs billions if you treat all the patients but there is a clear potential to eradicate this disease. On other hand, end of life care with ventilators+ tracheotomies - cost billions too but you could argue is that really good quality of life. Drugs that seemingly were effective and cheap suddenly become extraordinarily expensive because of how a free market economy works - they add considerable amount to the costs. And there is waste - both fraud and irresponsible behavior. It is reasonable to estimate that nearly 20% of medicaid costs are due to irresponsible behavior - patients who do not take expensive medications provided free of cost by medicaid programs and show up in emergency rooms with serious complications that cost billions to manage. It all adds up.
2
Well. I lived for years in the US, and years in Holland. I have plenty of health issues and have made wide use of both systems. My experience is broadly different than that characterized in the article. I received 2-3 times the quantity of care, for the same issues, in the US as compared to the Netherlands. US healthcare is about business and quantity of services (sales) is every bit as important as price. Dutch healthcare is about health and is administered judiciously with family doctors in the gatekeeper role. Here, we achieve the same health results as the US for a bit over half the cost. Go figure.
27
We gave up our health insurance when the monthly premium more than tripled in 2016, and paying cash has been a revelation.
For example, we went to Walgreens to get flu shots this year, but couldn't get them - the pharmacy spent 15 minutes researching, but simply couldn't determine a cash price.
My wife had a kidney stone last year, and we paid cash for visits to our family doctor of 32 years (great doc!) as well as an MRI. 45 days after the situation was resolved, we received a bill from a "medical consultant" whom we never met, and who thus far has been evasive on what (if anything) they actually did. Tellingly, they tried to file against our 2015 medical insurance plan, obviously unaware it was no longer in force. Discussions (slowly) continue.
America's reliance on health insurance corporations as gatekeepers to health care has proven to be disastrous. Until patients can actually see, understand, and negotiate prices for services, nobody has sufficient incentives to reduce costs. Why is full price transparency not required for all medical services?
150
Full-price transparency would open the market to competition. Why don't we have publicly funded elections and restrictions on the revolving door between Congress and lobbying jobs? Makes sense for the greater good.
9
Seems good, although when someone's having a heart attack or other emergency, there's usually not enough time or sense to negotiate.
3
What if instead of a kidney stone it would have been a tumor? How would price transparency have helped you afford care?
Do you think price transparency equates with affordability?
Your personal solution is simplistic and potentially disastrous in dealing with serious illnesses. A GP office visit is relatively low tech. Spend a week in a hospital and see how well price transparency works for you.
5
Others have noted the failure of public policy and public spending with respect to health determinants such as housing, education, food and nutrition, working conditions, racism and social inclusion, a failure that is dramatically getting worse under the current Congress and administration. That said, another major factor is the set of perverse incentives in a partially insured, largely private system. Well insured patients are overserviced, overdiagnosed, and overtreated to the considerable detriment to their health (but to the considerable profit of providers); less well insured patients are underserviced, underdiagnosed and undertreated causing them great harm as well. No other developed country has either of these problems: pernicious public policy and a structurally defective healthcare financing and delivery system. No wonder Americans are sicker and live shorter lives than even the poor Cubans, let alone the Germans, Japanese, Swedes, Danes, Canadians, Croatians, French . . .
13
This article may be one of the most shallow i have ever read on health care economics. So, it is high prices that make for high medical costs. Who would have thought? Maybe in chapter 2 the authors could look at Medicare's inability to negotiate drug prices, zero regulation on drug price increases, silly patent extension rules, rules favoring excessive high wage technicians such as requiring anesthetist for a colonoscopy, and so on.
27
No, not really. Ask a doctor, or many other people, and they will blame the patients.
That we are being gouged is a revelation to many.
As a health care provider (pediatric dentist) I resent that the authors blithely paint with a broad brush and state that ALL who benefit from high prices oppose single payer.
“A single-payer system could also regulate prices. If attempted nationally, or even in a state, either of these would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies — and pretty much every other provider of health care in the United States.”
The fact of the matter is that MANY health care professionals, including me, support, and would welcome a single payer system.
The elimination of the waste, inefficiency, obeisance to stockholder profits and gargantuan salaries of commercial healthcare executives and pencil pushers could ensure that wet gloved health professionals and others who actually TREAT patients will still make enough money to attract smart people who care for, and about, their patients.
347
Here, here! Well said, and thank you..
17
You are not what he meant by those who benefit from high prices.
3
Dentistry is special. You can call 5 dentists to ask how much 1 wisdom tooth removal will cost and they will actually give you a reasonable range. You can ask how much would be to do it under full sedation vs. laughing gas+valium, and again you can get a reasonable estimate. Free market is working in dentistry. Try calling a clinic or a hospital asking how much a hand X-ray is... I've tried doing that - only 2 out of 5 got back to me with estimates of $800 and $3000, the rest said "I have no idea until I process the claim". For an x-ray, not the treatment.
26
After reading this article I kept scrolling down looking for the rest of it. The writer seemed to stop mid thought. It left me wondering if he looked into two areas of spending that other countries don't spend so much on. The first is drug and service advertising. Advertising drugs directly to the consumer instead of to doctors is ridiculous. I've begun looking up the price every time I see a commercial for a drug. It's eye opening to say the least. Drugs for various skin conditions can cost upwards of $4500.00 . Diabetes drugs are $650 -400.00 per month. I'd rather cut the ad costs and rely on my doctor to choose the proper medications. The second huge healthcare expenditure is the cost of insurance to defend against lawsuits. Malpractice certainly exists in some cases but, like it or not, medicine is an inexact science. The outcomes are not always positive and that's just life. I'd like to pay for my healthcare without the cost I'd ads and lawyers.
18
The cost of college & medical school combined can equally amount to $500,000. Young doctors need to be compensated adequately. They have delayed earning years for training. As it is, it is harder to attract young people into the lower paying primary care areas. They have too much debt. Today's med students are specializing and subspecializing more than ever. They are not only paying that off but paying rent and overhead in newly minted practices. Furthermore, the U.S does more research and creates more pharmaceutical drugs than any other country. That costs money. And let's not forget foolish malpractice litigation that drives up costs. Americans love to sue. Finally, comparing single payer systems to ours is ridiculous. Far too many import poorly trained doctors and nurses from third world countries because the poor compensation no longer attracts their own. Others such as Israel, offer tiered plans whereby quality care is privately paid beyond the basic government offering.
The insurance companies in America are problematic but if you think government is your savior, ask yourself why the private sector here is always more efficient than anything government run. These comparisons by the NYT are poorly researched and understood and serve only to promote their left wing agenda. Go to these other countries and decide for yourself.
4
Actually, we lived in several European countries for many years, including Sweden, UK, and Germany, and the care was much better. Doctors and services were great, there was no waiting time, no administrative load for us, almost no out of pocket expenses, and all that was just standard insurance. In the US there is an enormous administration related to our doctor visits. First we need to figure out which doctors are in our plan. Then nurses spend time calling our insurance to double check they cover us. Then there are deductibles and other limitations that are very difficult to understand. And then the doctors often try to give us medicine and services we don't need, so we need to always do our own research as well. And finally, the system in pharmacies is terrible, one often needs to wait half an hour or more for one's prescription! In Europe we'd get it in a minute. So yeah, we've been to those "other countries", and paid much less for a much better system.
263
Give me single payer and the far better OUTCOMES for health that follow.
9
"ask yourself why the private sector here is always more efficient than anything government run." Actually, ask yourself why so many people believe that the private sector is more efficient than "anything government run". This has never been true as a general principle and is one of the underlying myths of neoliberalism which has dominated public policy for nearly 40 years and has destroyed what was once a truly dynamic economy that built the real progress of the 50's and 60's.
25
The biggest problem we have in the U.S. is the entrenched current system with all of its greed. We keep paying and they keep taking. In my view a single payer system is the only way out of this horrid mess.
99
On a population-wide basis, medicine is not cost effective. Instead of building health, we spend on meds and hospitals, etc. to increase the Medical Industrial Complex's profits.
Tens of billions are spent annually on treatments for irresponsible eating, idleness and sex (Hep C, HIV, Chlamydia/IVF, plus having kids while older).
https://medium.com/@forecheck32/medical-care-is-overrated-68c801b61a6c
Barely mentioned in this article is the impact of social determinants of health. The US spends far less than other wealthy countries on social services such as housing, transportation, nutrition.
The Brookings Institution published a study last year looking at the combined spending on both health and social services. While the US spends more on health, we spend much less on social services compared to other countries. All in, we are in the middle when combined spending is taken into account.
https://www.brookings.edu/blog/up-front/2017/02/15/re-balancing-medical-...
The net effect is that we have put a lot of our social problems into our health and legal/penal systems. Then we complain about how much we are spending on those systems.
These problems won't be fixed until we, through our elected state and national leaders, address these issues holistically.
12
Healthcare in America is an oxymoron, meaning that for Americans with a spendable income, healthcare is available and good. For everyone else, healthcare is unavailable and/or inconsistent.
Our problem is how we navigate the healthcare insurance field. Insurance Companies charge much and each year fees increase but insurance coverage decreases. The Insurance Companies represent a big business that wants profits and to increase their bottom lines, neither has anything to do with healthcare.
Finally, Hospitals, Physicians, Pharmaceuticals, Medical Devices have all learned how to play the system for more profits for themselves but has nothing to do with healthcare.
The American consumer has been eliminated from the equation entirely for our Representatives are bought by the powerful healthcare lobby and money talks the loudest. We have been sold a tale of "freedom" in regard to healthcare but the true result is the destruction of a National Healthcare system that would deliver affordable healthcare for all Americans.
13
In my experience it is an assembly line process, in the office and in surgery. Depending on the outcome, doctors think nothing of having you spend endlessly to fix their mistakes that are unfixable. Those glass towers are expensive.
5
do health care providers in other countries have to show profits to their shareholders every quarter?
10
I have had the fortune or misfortune to have received medical attention in a number of countries including the USA, France, UK and Cayman Islands in the Caribbean.
In each case I paid privately.
USA costs are not 60% higher than other countries, they are about 3 times as high.
My wife called an ambulance for me in Tampa Florida after I collapsed. Cost of 3 miles journey to hospital was almost $2,000.
I had a similar incident in Grand Cayman and was taken a slightly longer distance. The ambulance cost was $200.
I broke my arm in France and was taken by ambulance to hospital there. Complete cost of treatment including ambulance, emergency room, x-rays etc. was $350.
Prescription drugs are the same. Plavix is 3 times the cost in CVS in Florida as it is in my local pharmacy. Same with many other medicines.
I could provide a dozen more examples.
A big factor is the increased burden of litigation in the USA if the slightest thing goes wrong.
But it's mostly high prices caused by your government being bribed by drug companies and medical lobbyists to prevent competition.
328
The 'burden of litigation' is more of myth than a reality for most medical practitioners. It is less than 1% of all US health-related spending.
The cost varies as insurance firms enter and leave the market in response to the return on capital invested by insurers, not necessarily the number of medical malpractice cases.
Yes, there are some specialities, OB/GYN childbirth procedures is an obvious one, where litigation expenses are high as the cost of lifetime care required is high
I concur on your other points.
11
In countries with universal healthcare, malpractice premiums are far lower. In Canada, with single-payer, OB-GYN malpractice insurance is 10% of what it is in the US.
Malpractice: Another kind of insurance that makes boodles of profits. Universal healthcare reduces malpractice premiums b/c a lifetime of healthcare isn't a bankrupting phenomenon in countries with universal healthcare. It's paying for a lifetime of medical care that drives litigation for families who need the money to ensure the damaged family member isn't kicked off insurance ... or that the family doesn't face financial calamity.
8
The commentary ignores two important facts that drive healthcare prices in the United States: 1. Insurance companies keep roughly 20% of the healthcare dollars. In countries with a single payer model, the administrative costs are 2%. Hospitals, Physicians, and other providers spend at least 10% of revenue (directly or indirectly) dealing with the overly complex reimbursement system. Single Payer systems work more like credit card transactions. The multi-payer, largely private insurance system in the US accounts for at least 28% excess spending compared with other nations.
2. Americans have come to expect very fancy offices and hospitals. Most OECD countries have more modest buildings. (not as much marble, fancy atriums, etc). Hospitals in the US are being built more to a Ritz Carlton standard than a Marriott standard. I'm not sure Americans realize they are paying for all this fancy architecture, but it is definitely one of the drivers in cost.
There are probably a host of other reasons, but these two probably account for a large part of the difference, and neither results in better care for patients.
118
The cost disease highlighted in the article also applies to education. Like medicine, education has experienced tremendous growth in the number of administrators.
15
Under Nixon, HMOs arrived. Nixon said of them, "All the incentives are toward less medical care, because the less care they give them (patients), the more money they (HMOs) make." HMO dividends have skyrocketed.
Pharmaceutical companies love the U.S. They charge whatever they want here, and the US pays it. I live in Paris. France rigorously screens new drugs, for efficacy, methods of testing, statistical results, side effects, if there's a market for the drug, if supplemental insurance providers want to pay for it. The process involves 3 ministries and 1 business organization.
At the end, pharmaceutical companies are offered a "take it or leave it" price for the drug. The pharmaceutical companies take it, because all of Europe follows this French model.
I have many clients who work for big Pharma in Europe and travel to the U.S. Their companies love U.S. profits. The reps love the commissions.
The U.S. pays 6% more of its GDP toward health care than France. This has gone to investor dividends, not healthcare.
In 2017, the CDC said that 28.2 million people lack any healthcare. With the new tax bill and anticipated reductions in Medicaid, this number will increase.
Using the French model with BigPharma is a step to lower healthcare costs. Single payer care via Medicaid is logical and egalitarian.
Prying the profit motive and investors out of health care will be a brutal fight--insurers will never fight tooth and nail for your health, but they will for a buck.
252
Less anti-trust and more mergers in health care, which is now big business. Like all big business these days, the name of the game is price increases, bigger profits, less worker benefits, asking more of doctors, nurses, etc.; squeezing as much as possible out of every consumer (patient), with less time and fewer services. It is another contribution to income disparity, to our eroding middle class. And that just cannot go on forever. We'll go down in history as an example of all that's wrong with capitalism without humanity.
23
No news here. Economist Milton Friedman wrote about this 50+ years ago. A recent book by former NYT health writer Dr. Eliz. Rosenthal ( 'An American Sickness') discusses both the problem and various remedies. Given our political system (which panders to powerful business lobbies [yes, that includes the medical industry]) it's likely little will change.
9
We spend over three trillion dollars a year on healthcare and we are spending almost twice as much as the other advanced countries. That amounts to something more than a trillion dollars a year in overspending. In pharmaceuticals, alone, we spend over three hundred billion dollars a year. Compared to the other advanced countries that amounts to something over a hundred billion dollars a year.
There's a lot of talk going around about Medicare for all but if the American people are not going to punish Congress for doing the bidding of their healthcare lords, universal healthcare is a pipe dream.
Whichever party turns against these lords will be seen as great American heroes. The first, and easiest target, of course, would be the drug lords. Everyone, across political lines, hates them.
The problem, of course, was just demonstrated by the Republican Congress writing a roundly hated tax bill, to give a trillion dollars to billionaires and multi millionaires, betting that the American people are too dim or too forgetful to punish them.
And it's not just Republicans. Quite a few Democrats vote in favor of the healthcare industry also.
It gets down to the American people being willing to punish Congress for allowing this scandal to continue.
It also gets down to media like the Times continuing to beat the drum again and again, till the message sinks in.
26
Duh? Of course it's the prices. In a study of Seniors who were on many medications, it was found a certain percentage had trouble "remembering" to take their meds. No matter what memory devices were employed, certain patients still had a problem. Lo and behold, after all other methods were tried, when the price of the medication was reduced there was a dramatic increase in "memory". Well, who'd a thunk it?
DD
Manhattan
7
They must be joking!
Frakt and Carroll write: "Higher prices aren’t all bad for consumers. They probably lead to some increased innovation, which confers benefits to patients globally. Though it’s reasonable to push back on high health care prices, there may be a limit to how far we should."
So we should totally ignore the fact that other developed countries offer better healthcare for more people and at a far lower cost than the American system? "Higher prices aren't all bad"? Tell that to the millions of Americans who can't afford health insurance. Tell that to the millions of Americans, many who were desperately sick, who flooded doctors' offices once they could get health insurance through the ACA.
I am constantly shocked at the stunning lack of reality of The Upshot's columns on American healthcare. The truth about the desirability of single-payer is cannot be told. Instead, we get one justification after another for our broken and immoral health system.
Enough!
15
You said it all Sean! And adding my two cents, who are the author's of this article working for?
1
Fear is totally exploited in this country for the sake of profits. Insurance companies control our lives totally: car insurance, home insurance, health insurance. It's legal robbery. Even Medicare is a scam.
1
Seriously, we need to be told this AGAIN? How many times does this need to be said? When is this US going to learn that without sensible price regulation this is never going to end. Are we going to wait till health expenditure consumes 30% of GDP? 40%? Unrestrained profits have no place in health care. The authors claim "...higher prices aren’t all bad for consumers" because "(T)hey probably lead to some increased innovation .." The innovation you can't afford confers no benefit whatsoever. The drug you can't pay for has zero efficacy.
18
Let's put this in real dollars and cents. The Federal and state governments pay directly and indirectly about 65% of all health care. If the U.S. cuts heath care costs by 50%, then this saves government $1.06 trillion and consumers $593 billion a year. That is $5,150 per person in the U.S. Given what is at stake for everyone, why isn't our government addressing this problem. Corruption???
11
The statistics I have put the government's health care share at about $1 trillion, while companies and individuals pony up $2 trillion. Where did you get your numbers?
While we have this expensive and inefficient healthcare system, we cannot find the money to adequately fund infrastructure, public education, low cost housing, etc. And soon we will hear that we cannot afford Social Security. Somehow we need to figure out what our priorities as a country are! There will necessarily be pain if we choose to address such a change in national priorities, as there is much investment in the healthcare industry that will be lost. But what is the option, the continuing deterioration of other needs? Isn't it clear that we cannot afford to support this inefficient healthcare system when we have other pressing needs?
3
Healthcare should not be a profit center.
13
I have been saying since very late 90’s/2000...”Healthcare in the U.S. is capitalism gone Wrong.” There are so many extensions to that argument but suffice it to say, too much is charged and too much is made in the U.S. system. It’s just wrong!
5
An encore of the past?
At last, an article about the cost of the health care in the US ! The NYT should, up until significant steps are taken, cover every day the health care system in the US ! To put more dots on I's, such a system, here, plagues this country, that has to devote, if compared to other developped countries, up to 10% more of what it produces, creates... to such expenses, and thus deprives itself to spend that money for other purposes, but also, cherry on the cake, this system is so plagued that the life expectancy, here, is three to four years shorter than in those countries ! In plain english, the health care system in the US is a failure, by far the biggest here. How to reform it. The majority of the people living in the US ought first to recognize and accept that being healthy is to a significant extent a matter of luck, and second, that, therefore, we have to mutualize the taking care of our health, ie: that a state (Washington) driven single payer system is the solution, as it is in every other developped country. For sure, that should transform our health care involved professionnals into quasi civil servants, that would marginalize the very costly medical insurance sector, that would impact the bottom line of the pharmaceutical industry, of the health care professionals, of the hospitals...but, bottom line also, the US would be able to use the money spared for other purposes, starting with the decrease of the inequalities, the highest ones also in the developped world...
1
What is better is recognizing that one's personal health, rather than being "a matter of luck" can be under one's own control. We can't personally change our government, but we can determine what we put in our mouth and how much we move. Simple starting point--pay attention to salt and refined sugar intake, especially when eating processed foods. Eat more whole vegetables and fruits. Move fast enough to get winded at times. Genes can be modified by lifestyle, not luck.
2
America's true religion is profit, over all else. It can't last.
8
Au contraire. Profit, generated in an environment of free competition, is the wellspring of sustainability. Everything else is subsidy.
And in other news, the sky is blue and the sun rises in the east and sets in the west.
2
The article is a Gilbert and Sullivan operetta. It offers nothing of substance or direction. The commercial on television about a monitor instead of a protector is the most apt comparison. We have enough monitors in our government, we don't need any more in journalism. The dumbest words in the English language have become. "We need to start a conversation about...." Promptly followed by complete rejection of anything substantive on the subject.
3
This article is an example of specious reasoning. The reason that most other developed countries (which have universal healthcare coverage) do not have health services usage issues is that they ration access to, or the delivery of, services. That rationing either is overt or through long waits to access services. If the U.S. wants anything approaching universal healthcare it will need to ration healthcare services. Also, since the article invokes Uwe Reinhardt it should be noted that he used to say if you don't want a capitalist healthcare system then don't allow for-profit healthcare. And that includes all physicians and most hospitals.
1
We have rationing here in the US too. It's called HMOs, health insurance and poverty.
2
Isn't, basically, the essential problem that doctors get paid more in America?
Why doesn't that get mentioned more? My friend Greg Cochran has a theory that nobody wants to say anything bad about doctors because, we worry, if we get them mad, they might take vengeance upon us on the operating table.
4
U.S. medical students graduate with $300,000 + in student loans. In Europe, medical school is FREE. Primary care physicians here in the US make a good living, but way less than most Division I football or basketball coaches (surgeons are an exception), big bank executives or hedge fund yahoos . Primary care physicians in Europe are still comfortable, and don't have to deal with insurance companies second guessing them at every turn while cutting reimbursement rates, or worrying that their uninsured patients won't pay them at all.
8
@Kris - There are nearly 900,000 doctors in the US. It is unfair to compare their incomes to a couple of dozen football coaches or hedge fund honchos.
After all, nobody need to have a football coach or a bank president, but everyone needs to have a doctor.
This piece has cause and effect totally backwards. Prices are an EFFECT of behavior, in this case a function of exponential increases in spending on health care on the part of both governments and businesses, at the same time that supply has been limited by ever increasing regulation of medical care. It is no coincidence that health costs began to skyrocket shortly after Medicaid and Medicare programs were fully implemented in the late 1970s, AND THEN the folly of the infamous "Diagnostic Related Groups" (DRGs) - which dictated what could be charged for every single medical procedure - was layered on top in the early 1980s. When you boost demand and limit supply, what else do you expect would happen? The crony capitalists have had the run of the industry for a generation now, and the bureaucrats exacerbate the problem by simply throwing more money at it every year.
3
This article could be interesting, except that it's somewhat contradictory and very incomplete.
it's contradictory in that for the most part, it says that US people do not consume more health care services than European/etc, yet the 4th from the last paragraph (starting "Did we do more...") says that "... most of the explanation for american health spending growth is that more is done for patients..." What does this mean? it sort of implies that we _are_ consuming more healthcare services. No?
it is incomplete in that it doesn't really say what it means that we "pay a lot more for it". Does it mean that we have the same number of x-rays as Europeans, but our doctors and technicians have higher salaries? Does the X-ray manufacturer charge US customers more than European ones? Do landlords charge more for rent? etc etc?
In short, very disappointing
7
We have a parallel para health care system that overlooks our medical care, known as our legal system which is ready to pounce should anything, any diagnosis, be missed. So we do massive testing on everyone leaving a large medical foot print for each patient whether they have a serious or trivial complaint. This way if the Doctor ends up in litigation, the plaintiff's legal team can't pull the rabbit from the bag and say if you had only done an MRI or CT or Cardiac Cath, the patient now a plainitif's life would have been saved or the medical condition treated successfully. No Doctor wants to go into court and hear those words, so we do everything, on everyone, so as not to have an empty defense if the time should arise. This is more than defensive medicine, it is adversarial, constructing a case in the event a case should occur. This is why healthcare in this country costs so much. B
7
I was wondering how many physicians would pull that old line out of the hat. It's not true. If you are in a field where you do something catastrophic, then you're at risk, but for the most part you overcharge because you are in a monopoly and the cards are stacked in your favor from a liability standpoint. It really is that simple. Medical lobbying uses everything from eliteist lobbying (after all you have the money) to scare tactics to keep your treasure. Almost every state provides you with affordable insurance, limits on damages, strict expert witness requirements, and rules of evidence that severely limit the presentation of viable evidence. What isn't accomplished with that is done by peer pressure ostracizing physicians who dare to criticize the poor practice. When the medical profession wants something what they can't get legislatively they threaten withdrawing care from the community to get it. I can cite instances, but I'll give you a short one. When the physicians of a small town wanted a new school addition to the grade school, they threatened to leave town if they didin't get it. They got it...then left anyway. So you'll get some but not much sympathy here on that basis. I've seen your contracts. One orthopod made so much money he had no place to invest it so bought a herd of cattle. A local general practice dentist here has the most expensive house in the city. There are two sides to every coin.
5
The big newspaper in this state did an article on who was paid the biggest salaries in the state. The people were all medical. Out of all the industries and occupations in the state. Locally a shopping center was bought by a doctor, undoubtedly a specialist; another one was buying local real estate with the idea of finding commercial clients to develop it. Got more money than they know what to do with. Meanwhile the primary care docs are not in this league but still have to waste time in endless dickering with insurers.
I know someone who is on an expensive (with a lot of built in profit) therapy and the insurers have managed to avoid paying for months, leading to great stress. And will they ever pay or find some reason to stick it on the patient?
1
To a great extent, this is not a medicine malpractice problem but rather a basic social welfare issue. If one is injured or disabled and unable to earn a living or care for oneself the government is not going to make you whole.
You can maintain a subsistence living on disability payments and Medicaid, if you qualify, but that's a pretty miserable existence. Ergo, people seek individual remedies through lawsuits. Perhaps if there were a reliable social safety net, people would not feel compelled to seek redress through the legal system.
3
One problem is our focus on GDP. When the amount spent on health care goes up, so does out GDP and we rejoice because economic growth is considered a good thing. We need to start focusing on our health and the well-being of our society. GDP and its growth are very misleading measures of progress.
8
Austin and Aaron, I can summarize your flowery, diplomatic piece in one phrase.
America unique to the rest of our peer countries (and many non peer countries) has a de facto criminal health care system that puts the profits of billionaires over the health of Americans.
The rest of our peer countries have figured it out, a single payer system or something like it regulated by gov't.
Unbridled free enterprise does not work in health care.
We have proven it.
517
Where did you get the idea it was free enterprise? It's not. It's a monopoly, pure and simple, and they eat each other within their monopoly and pass the cost to us.
44
Totally agree.
Free enterprise that gets guaranteed markets from the govt, that has customer price sensitivity reduced by subsidies (so I can raise prices at will and have no effect on the consumer), and Big Pharma gets protection against volume discount negotiations from Medicare. (Thanks, Congress, for making that illegal.)
The only way out of this mess is to remove middlemen who don't help healthcare — and to allow price negotiations with huge players making record-breaking profits.
This means removing insurers whose financial health puts their interests in conflict with patients who need medical treatment to achieve physical health.
The GAO and the CBO concluded (in 1992) that we could have universal healthcare, better cost control, and some expanded coverage by moving to a single-payer approach — for less than we were paying with our current system of private insurers.
Physicians for a National Health Plan (PNHP.org) has wonderful information.
13
Thank you for your reply BD. Well it is a matter of semantics, free enterprise, monopoly or something else. Bottom line it is de facto criminal.
1
Unfortunately, the article only explains that costs are high. (Duh.) It doesn't answer *why*.
The two big drivers: 1) No cap on medical costs. Healthcare law states that insurers *must* pay for services and products deemed medically necessary. Usually price is a rationing force. Not so in healthcare; providers can set their prices as they please. The only thing keeping prices from rising higher is shame and conscience on the part of pharma, hospitals and doctors - and that's in short supply. In Europe, governments are empowered to cap what is paid for a treatment. No surprise: providers all lower their prices accordingly. As a result, they pay half for as good - if not better - outcomes.
2) Preventive medicine. Lawyers claim that malpractice claims are a small pctg of overall healthcare costs. True. But liability premiums and the *fear* of lawsuits have an enormous ripple effect, leading to the ordering of tests for highly unlikely conditions "just in case". This is not the case in other developed nations.
Insurance companies have little incentive to drive costs down. With the medical loss ratio section of the ACA, medical savings flow to the customers, not the insurance companies.
Only the government can halt the rise in healthcare costs. We must empower them to do it.
24
Pharmaceutical and medical device companies get to name their own price. For hospitals, doctors and other providers, half their patients are on government plans where they have to accept the government price--no price negotiations allowed.
That is not really the case. Each insurance company negotiates a contractual fee for each service or drug. It may be quite high, but the doctors and hospitals can't charge 'whatever they want'.
1
As we are aware most western democracies have some form of single payer systems, some provide all cost some only portions. Single payer systems don't include Insurance providers for the most part. Governments pay Physcian's, Hospitals, and negotiate with Drug companies . Our system is easily explained as the article states our % of GDP for heath care involves four main players. The AMA, for profit hospitals, Drug companies , and Insurance companies . All in the loop for the maximum they can charge. Those 4 influences will never lose their authority or influence. As health care improves people lives prices will only increase .
3
The commenters criticizing doctors and other health care professionals for their high salaries should recall the enormously high cost (monetarily and personally) of medical school, residency, and the profession writ large. Many of them go through intensely rigorous training for 7 years (to say nothing of the prior 4 PLUS the MCAT/interview cycle), so there must be an incentive system that makes it worth their while. Once they begin practicing, the intensity often subsides only slightly. Can you think of many other jobs in which folks spend 12+ hour days making life or death decisions?
I don't begrudge the surgeon who saved my father's life (with an 8-hour-long whipple surgery) his $700k salary. He's saved hundreds of others, and he's more than earned it.
6
Perhaps we don't need such intensively trained people for routine care. In Europe, Japan, Taiwan, and other advanced countries, they don't have such a long and arduous medical education.
3
Staff in doctors' offices spend a huge amount of time handling insurance issues. Coverage differs from one plan to another and they are constantly dealing with the administrative requirements. Nurses wish they could spend more time on patient care and less on paperwork.
How much do the administrative costs affect price?
9
Anybody who has received an Explanation of Benefits statement from their healthcare insurance carrier immediately sees the difference between the requested reimbursement and what it actually costs to provide healthcare. The difference is crazy. In my case, procedures billed at amounts on the order of $15,000 have been settled for as little as $3,000. So for starters, why don’t we just get billed at realistic amounts (assuming that realistic just means not exhorbitantly overbilled) and then pay for the charges? We don’t go the the grocery store and find milk priced at $12 and then pay $2.50 out the door if we have insurance while some other poor sap pays the entire $12 ridiculous price.
Once we get to the point where there is some reasonable relationship between the asking price and the actual cost of service, we can start working on the cost of service. And if we can ever get to the point where consumers know in advance what they will be charged and what they will get for there money, they can start to make decisions, maybe not entirely informed and rational, but at least not fantasy-land.
No doubt some costs can be controlled better than they are now. And no doubt some regulations can be changed, like allowing drugs to be imported to break the monopolistic pricing of certain medications that we see in the headlines. But overall, as in life generally, honesty and transparency would be good place to start.
19
I agree. People with good insurance pay less in two ways, the lower negotiated rates as well as how much the insurance pays. People with insurance through smaller companies generally will be paying closer to the listed rates and those without insurance get stuck with the full rate.
We are always being told to research medical costs, but there is no way of knowing what you will pay until you get the bill.
As has been int he news a lot recently, a lot of sole source drugs have increased more than 1,000 % in the last couple of years. In addition, many of the new drugs that have come out can be made for very little (yes, I know that there is extensive R&D in the cost, but most drugs companies pay more in advertising than R&D), but they charge hundreds or thousands of dollars.
7
They bill very high, to make sure that they bill at least as much as the allowed amount under their contract with the insurance company. They wouldn't want to leave money on the table, would they?
The uninsured people can frequently negotiate an even better deal than the people with insurance, if they pay cash up front.
@Jonathan: That sounds like some sort of urban legend. The multibillion-dollar insurance company that I pay for insurance negotiates rates that are typically 70%-80% less than providers' list prices.
I sincerely doubt an uninsured individual with no negotiating power is getting a better deal.
I think it is irresponsible to quell out one part of the healthcare industrial complex and say prices are too high. Insurance companies exist in other countries too. The entire food chain is simply overpriced - doctors, nurses, pharma sales reps, device sale reps, hospital administrators, big pharma administrators, etc. Like in other industries, a huge correction has taken place but it has not hit medicine that much other than bringing costs down for Medicare-provided services. A huge correction needs to take place in US medicine. Many jobs will be lost, many efficiencies should be implemented. It's not if, it's when......
3
Well hello! Anyone with cursory knowledge of the US healthcare system knows this. Insurers are invariably depicted as the villains but although they do engage in rent seeking they are no the real problem. Doctors are paid at least twice as much as in Europe, drugs cost twice as much, routine procedures cost multiple times as much. Reinhardt was right. It's the costs, stupid. But to fix this a lot of oxen will have to be gored.
89
Doctors are indeed paid more than in other countries. But they also have to pay for their medical education here. Most everywhere else the education is free to the student... paid for through the higher taxes levied on the overall populace.
24
Peter - your allegation that "most everywhere else the education is free to the student" certainly doesn't apply north of the border. Med school tuition in Canada, while certainly not as high as in the US, is still pretty pricey compared to other university degrees.
So it's like... overpaid doctors teaching how to become an overpaid doctor.
30% of the cost of healthcare in the USA is attributed to administration costs and profit for health insurance companies. The costs borne by consumers goes up every year, through rising premiums, co-pays, and deductibles, which only increases insurance profitability.
As long as these consumer based costs are not somehow regulated, insurers and providers have no incentives to reduce the costs of healthcare delivery. Providers don’t care about rising insurance costs, their negotiated rates are always covered and insurers don’t care about rising healthcare costs, they simply raise premium rates, deductibles, and copays to cover increased healthcare cost.
The healthcare providers and the healthcare insurance companies have no real incentive to cut healthcare costs.
It is interesting to consider that we already spend allot of money outside the healthcare industry keeping people healthy. Safer roads and bridges, safer cars and aircraft, cleaner air and water reduce injuries, deaths, and illnesses as much as physician delivers healthcare. All these indirect health safety measures are funded through taxes. Yet, we balk at taxpayer funded, physician delivered, universal healthcare.
58
@John Barry
Where do you get the nonsensical number of 30% from? Insurer's, who cover about 173 million people, have stop loss ratios (admin costs, retained profit etc.) of 15 to 20% and Obamacare imposed caps. Medicare/Medicaid/VA who cover another 132 million have admin costs of around 5 or 6%.
This does total over $1 trillion dollars or 30% of US healthcare costs which are as the article mentions in the $3.3 to $3.5 trillion range.
5
Oops, that last sentence should have read
"This does not total over $1 trillion dollars or 30% of US healthcare costs which are as the article mentions in the $3.3 to $3.5 trillion range."
Oops. That last sentence should have read
"This doesn't total over $1 trillion dollars or 30% of US healthcare costs which are as the article mentions in the $3.3 to $3.5 trillion range."
Apologies.
the main reason is LITIGATION, the remedy? Tort Reformed, it shall produce results in weeks, study what it does to medicines, doctors ordering test after test to cover your behind , unnecessary hospitalizations etc.. etc. but no body wants to take on the layers, to start with, in the legislation all of them are layers.
4
@Manuel Diez MD
No it's not litigation. Total doctors insurance premiums to cover liabilities and payouts are less than 2% of all healthcare expenditures. A large sum in absolute terms but miniscule in the context of overall spending. Rampant over testing, hospitalizations etc. are much more due to revenue generating techniques by doctors and hospital systems (for whom an increasing number of doctors work!).
17
Dr. Diez, tort reform has not worked in Texas, why would it somehow work elsewhere? http://www.newyorkpersonalinjuryattorneyblog.com/2011/10/the-failure-of-...
4
60% of the expenses for 2016 of our insurance consortium were for pharmaceuticals. The increased use and expense of pharma seems the biggest driver of prices here.
8
Having lived in, and needed health care in, several countries, the problems with the U.S. health care system are pretty obvious. This piece suggests the issue is "prices," but that is itself merely a symptom. The underlying cause, the one that distinguishes the U.S. system from health care in other countries, is the collective determination of this country that health care (providers, suppliers, insurance) is an industry whose primary purpose is not to make the population healthier but to generate a profit. And that's it. The bottom line of the U.S. health care system is different from everywhere else, and THAT is the underlying explanation for "prices."
736
"Prices" reflect the exponential PROFIT appetite of the different health care providers or purveyors involved. So YES, it is the prices. These costs - can and should be CAPPED- since health should be considered a human RIGHT, thus it should be treated as a common service for all the population of a country, state, district, city or town. Regardless if is -ALL-PAYER-SYSTEM or SINGLE-PAYER-SYSTEM; the cost should be controlled at the source and by central entity. In the other hand, Innovation and R&D within the Health Care Sector should be incentivize via tax deductions in order to not jeopardize medical advances + much needed research.
20
Utilization is not the real issue. The "unit" prices for healthcare procedures in the US (facility and provider) are higher than anywhere in the world.
Why? Like Jet said, healthcare is an industry with the objective of making a profit. That also males us unique in the world of healthcare.
28
One man's health care waste is another man's revenue stream. Until we get a system like Germany or Switzerland, nothing will change.
12
Of course we pay more than other similar countries for health care. Have you ever seen a poor, or even middle class, doctor, hospital administrator, or pharma executive? Apart from some dedicated doctors who serve the inner cities, and rural doctors with a small, quiet practice, they're all rich. How do you think they got that way.
24
To Jim Tagley:
Most got where they are by working 16 hour days, six days a week. And most are still paying off hundreds of thousands in student loans, when others in their college peer group are buying retirement homes in Naples, FL.
5
I would hesitate to believe that we are subsidizing innovation with our high prices when the elephant in the room is the huge profits being raked in by Big Pharma and insurance companies, as well as the exorbitant salaries of specialists. Most innovation on the past of course has happened on university campuses, not in companies. Most of that will disappear as we cut our support for science, and we will be trailing Saudi Arabia.
88
I wonder whether more sophisticated coding by physicians and hospitals may have led to some of the apparent recent increases in care and prices. Until the last decade, i do not remember coding being an issue regarding care.
5
Yes it's prices. But the article falls short of the whole truth. The important part is WHERE the money flows or what drives those prices. Most doctors' salaries (adjusted) have been flat for years. And to make that income more patients need to be seen.
A more important insight is how money is divided up by technology in medicine and administration of medical care. This is the medical industrial complex and huge driver of cost.
74
The average income for all doctors in the US is $182K. It may not be going up, but the salaries of the patients aren't going up much either. The average salary of everyone in the US is $37K, so doctors make five times as much, or more if you back doctors' income out from the average.
7
Jonathan, doctor salaries may sound high in comparison with the average salary, but I think a better comparison would be to compare salaries of those who spent as many years in higher and post graduate education and training. Then subtract the cost of this education. I think the salaries would look much more reasonable.
What is less reasonable to me is the "administrative overhead" -- all those executives and bean counters and assistants who add very little to nothing in actually providing medical care, yet siphon off most of it's costs in bloated salaries. Especially compared to their level of education and training.
Thanks for your comment. I understand your point entirely. My intention in that observation was to say that the added income is not going to fuel higher incomes for docs in the US--that the increase in funds was going elsewhere. However, in other countries, docs do not make as much as US docs, that is for certain.
Emergency rooms are essentially our universal healthcare plan.
Add to that insurance and pharma profit motivations.
The books won't balance themselves, at this rate.
10
What is the role of managing our complex insurance and payment system on costs compared to other countries? The amount absorbed by insurance companies, and the cost of billing in such a complex system, has to have a significant impact on the overall cost of health care.
21
Definitely. Having a complex multi-payer system requires more administration layers to manage it. When a large part of medical provider and hospital staff is actually a billing and insurance specialist staff that accounts for some of the costs on the providers end that must be compensated for in the cost of care.
Dr. Reinhardt likened the health care system to a restaurant with no prices on the menu. To take that a step further, I would point out that the physician is like the waiter who suggests what you should order.
No wonder we're shocked when the bill comes at the end of the meal.
215
It is difficult and frustrating for employee physicians (i.e., many family physicians) to discover the price of procedures and they have no control over the price of things. They also have mounds of documentation designed for billing purposes and to document the patient history, treatment, etc. There is a lot of pressure to get patients in and out efficiently. Treating patients according to the "golden rule" is worth doing, but costly in time and financially to the physician.
11
I wonder what the pharma billionaire in Toronto would have said on the subject?
2
To extend Michael's analogy a little further, pharmaceutical and medical device representatives (salespersons) are like the maitre de's, telling the waiters which high-priced menu items to push on customers. Successful medical systems limit staff access to those very personable sales people and eliminate cozy lunches and dinners with same.
11
I live in Kenya and have health insurance here through my employer. While visiting the US (my home country) in July I came down with pneumonia and was hospitalized for two nights in Washington, DC. The total bill was over $22,000, and the only procedures performed were a CT scan and xrays. With the discount given for "no insurance," the cost was $8800, which my Kenyan insurance eventually paid. That's $13k surplus that gets billed to insurance companies.
When I came back to Kenya I was diagnosed with cancer and had emergency surgery to remove a tumor in my colon discovered the day before in a colonoscopy. I spent nine nights in the hospital. The total charge was about $11,000. Half the nominal US charge.
I'm now getting chemotherapy. So far my Kenyan insurance, which costs my employer a faction of what US employers pay, has covered virtually everything. No co-payments, no deductibles. The only thing we've paid for is getting a private room at the hospital.
There's a tremendous amount of room for price rationalization in the US.
At the same time, I realized while in the hospital in DC that a surprisingly large percentage of my fellow patients were indigent, addicts, or mentally ill. And part of the reason they're all in the ER or the hospital more is because of the inaccessibility of affordable health services. Something has to give.
417
The "$13k surplus" mentioned in paragraph one does not get "billed to insurance companies". Rather, it is a deficit in the specific hospital's budget.
US hospitals typically bill much more than is necessary to amortize their plant, buy housekeeping supplies, and pay their nonmedical staff. The extra money billed is used to expand plant in future both through cash implantation in reserve funds and as a demonstration of potential future income for the purpose of attracting investors and philanthropists.
13
Also not true ... what insurance companies pay is a fraction of what gets billed. Look at your statement of benefits for any procedure. What is irrational is the entire system of "list prices" for medical provedures that have no basis in reality
1
The $13k is a discount. I don't know who pays the "full cost" of care. Maybe private individuals who don't negotiate a discount. The discount varies among insurance companies. My routine blood test is discounted from $108.00 to $8.41 with my current company. I, personally, don't understand the thinking of "I've got mine, the rest of you, tough." Single-payer for about 7% income tax and government-negotiated drug prices (still private practice and drug companies) would probably do it. A few states are doing something like single-payer. Maybe, as more join in, it will come to pass, in much the same way as legalization of marijuana is progressing through states.
1
Neil M. -- I am 89 and so have a long experience of the British NHS. While it is not perfect it results in the British having longer lifespans than Americans at half the cost per person. It should spend more to give a better service but the Conservatives (British Republicans) boast of providing more money while in reality the extra money is far less than the increase in demand due to increasing population with more elderly people so they ensure the NHS is underfunded. I have a high regard for the NHS staff who do the best they possibly can in spite of the politicians.
159
This is all confusing.
Most of hospital stays are covered by insurance or Medicare and Medicaid - very few Americans are self insured or rich to pay these bills themselves.
And I was under the impression that insurance companies regulate heavily what they pay during hospital stays.
And we all know that Medicare and Medicaid heavily police these prices.
So, it would be good if the rise in costs was first divided between private insurance and Medicare system.
It would be also instructive know costs for doctors, surgeons etc and their rate of increase.
Also, it is not clear how one can compare hospital stays across different countries and cultures.
For example, in India where I currently reside - a post pregnancy stay of at least a few days is a society norm. Whereas, in America - it is being almost treated as outpatient.
I just finished living in England where their notorious NHS may cover all but they do it poorly.
A friend in Yorkshire was shunted over 6 months getting his tendons repaired. And hospital stays there are longer than at least what I know in America.
My own belief is that we Americans like to medicate ourselves a lot more, a so called "valley of dolls" that leads to a significant expenditure.
And with increasing wealth - medical expenditures probably balloon.
4
What's the point of the increased innovation benefit if even plenty of middle class families cannot afford even basic medical care?
384
Exactly Kay, The "innovation" doesn't seem to be helping us since we are falling behind our peer countries in health stats like life span, infant mortality rates etc., plus paying a fortune for it for those lucky enough to have health insurance.
43
The news daily features some innovation which, in theory, can radically improve some condition, yet these game-changers never seem to see the light of day. Are they out there and just not available to the non-wealthy public, have they been smothered in their sleep by industry greed or were they just bogus to begin with?
14
Easy...most middle class families also do not own Porsches. Does that mean we should not build them? Healthcare is a service, not a right, and there are different tiers of service that come with different costs.