AFAICT, every part of the health care system is abnormally expensive in the US. Basically every article that says "The healthcare system in the US is expensive because of X" is partially right. X is part of what's driving costs up.
It’s a common strategy when people point out that one area in US health care is too expensive/inefficient to immediately counter by saying “but area Y is even worse”. That way nothing ever gets done because there is not a single factor that’s messing up the system. In reality pretty much all sectors are f....ed and need reform. You can choose randomly any sector and start improving and get good results.
When you are designing a service, you can optimize for median latency or tail latency. Sometimes when you optimize for tail latency, median latency gets worse.
It is similar to the health care systems. The US system is awesome at doing really crazy life saving stuff. For example US is probably the best in keeping premature babies alive. In addition it has a ton of resources. If you want an MRI scan, you can get one in the US pretty quickly and easily. Also, the profits in the US subsidize worldwide drug development. This is why, if you look where all the really rich rulers decide to go for surgery or other complicated care, it is the US.
Canada and other countries optimize for the median case and rely on the US for their outliers. Look at the instances of Canadians coming to the US for surgery or MRI scans because they cannot get them in Canada in a timely manner.
I do not believe that this is accurate, in my opinion this assertion requires some documentation. I looked up the survival rate of premature babies and the neonatal mortality rate (28 days after birth) is higher in the US than in Canada.[0] I'm having trouble finding numbers on other procedures, in my opinion it may be because because the US is falling behind on them as well.
The one study I could find from 2000 that compares them showed
>Relative risks for infant death from all causes among singletons born at 32 through 33 gestational weeks were 6.6 (95% confidence interval [CI], 6.1-7.0) in the United States in 1995 and 15.2 (95% CI, 13.2-17.5) in Canada in 1992-1994;
I'm not entirely sure that this paper supports your theory. While they do establish that the risks for this subset of premature babies is higher in Canada than in the US, they do not attribute this to a better level of care from US hospitals or the US healthcare system. Reading through their conclusions, it sounds like they didn't even think that was an issue worth investigating. Instead they looked for population differences and end up theorizing that the difference might be due to age estimation errors.
The fact that the births of premature children in this category is lower in Canada could, perhaps, point to the opposite conclusion: because health care in Canada is less driven by profit, we are seeing better care before birth which could be lowering this number.
"Our results were fairly consistent between the United States and Canada. The RRs of mortality associated with mild and moderate preterm birth were generally higher in Canada. A small part of these differences in gestational age–specific mortality was explained by the lower absolute and relative mortality risks among US black vs white preterm infants, but the RRs for Canada remained substantially higher than those for the United States even after restricting the US analysis to non-Hispanic whites (ie, 8.1 vs 15.2 at 32-33 gestational weeks and 3.3 vs 4.5 at 34-36 gestational weeks for total infant mortality among all singleton live births). An even smaller part of the difference was the result of the slightly lower absolute risks for term (birth at ≥37 gestational weeks) births in Canada (ie, total infant mortality of 3.0 vs 3.1 per 1000 live births for Canada in 1992-1994 vs the United States in 1995). We are currently investigating other potential explanations and particularly whether the differences might be artifacts caused by errors in estimation of gestational age. Regardless of the explanation, however, the prevalence of births in these gestational age categories was much lower in Canada than in the United States, and the EFs were therefore similar in the 2 countries."
This was one case where the best hospital in the world for THAT particular procedure was in Canada - and is primarily a PRIVATE hospital.
(Though the hospital also gets some $ from the government, so I'm not quite sure what it means to be "private"...)
I think you can have both claims to be true: the vast majority of complicated procedures are best-in-class in the US, but there are some centers of excellence elsewhere as well.
That's not really true, though. Prices are set by the intersection of supply and demand. Oil demand is relatively inelastic, for instance, but the price is quite reasonable because there is tremendous competition in supply.
Prices are high in healthcare in part due to inelastic demand, but much moreso due to supply constriction. For just one, particularly egregious example of this:
If you want to open a new hospital in many states in the US, you need to acquire this "Certificate of Need". Who approves this certificate? Other hospitals in the area. It's as though Google required the permission of Yahoo to form a new search engine.
If I didn't know how much I had to pay for gas until two months after I left the pump, my gas would cost $25/gallon, and I would count myself lucky that I'm buying it from a station that has a reputation for not swindling me.
That is, of course, after my 'gas insurer' comped the station anywhere between $0 and $25, that number being determined by the astrological position, and retrograde state of the planets.
While this is true and it's difficult to open a new hospital in the US, it strikes me as unlikely that this could be blamed for the high cost of care. In fact, US hospitals have been merging and this seems to be a trend that is continuing to this day.[0]
I entirely agree that hospitals are part of the problem, but I think that casting this as a supply and demand issue is oversimplifying the issue. People who need health care very often cannot choose to "shop around" for their provider, the increase in mergers make it less likely there are any competitors in their area. Agreements between hospitals and insurance companies often place other health care providers "outside network", thus artificially increasing their costs. In the same way consumers do not choose their hospital, they also frequently cannot choose their insurance provider; often the health insurance comes along with their employment.
In my opinion, the tangled co-dependency between hospitals, insurance companies, pharmaceutical companies and all of the lesser industries that depend on them are all factors in the rising costs. Every step of the way along the chain, profit is maximized at the expense of the patient. We will need large scale change in order to address the issue and I don't think it will be easy.
I hope that some kind of "medicare for all" system will start moving things in the right direction. In my opinion, this system is failing everyone except the very wealthy.
> While this is true and it's difficult to open a new hospital in the US, it strikes me as unlikely that this could be blamed for the high cost of care. In fact, US hospitals have been merging and this seems to be a trend that is continuing to this day.[0]
You're citing this as a case against supply restriction...but I think it makes the opposite point. Hospitals are consolidating because it increases their pricing power. However, that only works because it's so hard to create new hospitals. If it were easier for new entrants to enter the market, consolidation amongst existing providers wouldn't have the power that it seems to.
> I entirely agree that hospitals are part of the problem, but I think that casting this as a supply and demand issue is oversimplifying the issue. People who need health care very often cannot choose to "shop around" for their provider, the increase in mergers make it less likely there are any competitors in their area. Agreements between hospitals and insurance companies often place other health care providers "outside network", thus artificially increasing their costs. In the same way consumers do not choose their hospital, they also frequently cannot choose their insurance provider; often the health insurance comes along with their employment.
Ya, this is certainly a problem as well. I suppose I would consider it to be within the umbrella of "supply and demand" though.
That seems obvious in general, but should be extra obvious to anyone who has ever received a bill from anything in the US health system.