What annoys me as an American about our health care is not that some other countries achieve better outcomes at much lower cost--it is that they do so in so many different ways.
For instance, if they all did it by having the government completely run the health care system, with all doctors working for government hospitals and clinics, and being trained in government medical schools, with all costs set by the government, then I could understand the US rejecting that as being too much government intrusion. (Note I didn't say I'd necessarily agree with such rejection--good health care arguably is more important than limited government power--I'm just saying I could understand such rejection).
But looking around, what stands out is how diverse the approaches of other countries are. There are some that do have the government finance and provide health care, much the way the police or military are provided by the government.
There are some that use private insurers paying, with care provided by private hospitals and doctors, but the insurance companies are non-profit and regulated.
There are some that provide care via private hospitals and doctors, but have a government run insurance program to pay for it.
See also the link on that page to the explanation of the four basic models used around the world. That page includes a striking way to explain the other systems to Americans:
These four models should be fairly easy for Americans to
understand because we have elements of all of them in our
fragmented national health care apparatus. When it comes
to treating veterans, we're Britain or Cuba. For Americans
over the age of 65 on Medicare, we're Canada. For working
Americans who get insurance on the job, we're Germany.
For the 15 percent of the population who have no health
insurance, the United States is Cambodia or Burkina Faso
or rural India, with access to a doctor available if you
can pay the bill out-of-pocket at the time of treatment
or if you're sick enough to be admitted to the emergency
ward at the public hospital.
This kind of problem seems fairly widespread in America. Americans are incredibly self-confident, innovative and have achieved a great deal as a nation. They are also extremely proud of their country.
Unfortunately this combination often leads them to assume things are good purely because they are American. They tend to accept their own familiar values and ideas and readily dismiss alternatives because that would be admitting failure. As a result you get incredibly conservative attitudes in some areas side-by-side with world leading innovation in another.
A major driver of U.S. costs that isn't discussed in the article is our parasite lawyer class, who drive up the cost of insurance for doctors and lead to widespread over-testing or "defensive medicine". Few Americans are proud of our litigious society.
Regarding the so-called "parasite lawyer class", you might be interested in reading "Blocking the Courthouse Door: How the Republican Party and Its Corporate Allies Are Taking Away Your Right to Sue"
From a Booklist review of the book:
By demonizing trial attorneys and exaggerating high-profile litigation
awards -- the famous McDonald's hot-coffee case -- campaigns for limiting
damage awards threaten to jeopardize the American right to civil jury
trials guaranteed by the Bill of Rights. Investigative reporter Mencimer
examines the Republican campaigns for tort reform that would protect
large corporations from "frivolous lawsuits." The campaigns carry the
dual benefit of supporting the interests of corporations that are major
Republican campaign contributors and hurting trial lawyers, who are part
of the contribution base of Democrats. Mencimer criticizes the media for
their lack of understanding about civil litigation, willingness to
swallow reports of litigation abuses, and failure to understand that
Republican tort reform will also limit the ability of news organizations
to sue for information. Drawing on national data and scrutiny of
individual cases, Mencimer defends the civil justice system and its
reliance on jurors, average citizens who are the same people who vote.
This is an eye-opening look at an important issue for readers concerned
with the civil justice system.
also, "The Lawyer Myth: A Defense of the American Legal Profession"
From the Booklist review:
However disliked lawyers have become, they have played an essential role
in the development of the American democracy, assert legal scholars
Strickland and Read. Taking aim at media critics -- left and right -- who
blame lawyers for a host of social ills, Strickland and Read debunk
several popular myths about lawyers. They begin with the notion that
there are too many lawyers and lawsuits, citing statistics to put things
into perspective, and they point to the benefits that have come from
lawsuits, including increased consumer protection from faulty products.
But they concede the need for reform in a chapter that calls for major
research into alternative legal mechanisms. Finally, Strickland and Read
look toward the next generation of lawyers and outline the
characteristics most essential for the practice of law: competency,
responsiveness, and integrity. They emphasize that it’s not what lawyers
bring to the law but what they give that makes a difference. This book
is not likely to stop lawyer jokes, but it is an insightful look at a
Malpractice suits are about 2% of healthcare costs, and that percentage is stable, so you're not going to make a huge difference by focusing efforts there.
The cost to avoid lawsuits adds up with a lot of tests that are not needed. Doctors end up doing whole batteries of tests on everyone to avoid the 1:1000 or higher chance that the person in their office with a headache really had an aneurysm and get the doctor sued for negligence when he sends them home.
Another side effect of all these tests is that many are extremely dangerous. CT scans in particular are ordered way too often and can does people with levels of radiation that lead to problems later in life.
I have anecdotal evidence to back up these claims: my mother is in internal medicine and my father is a surgeon. both have practiced defensive medicine and my father has complained about how common an occurrence it is on a regular basis.
Many tests, drugs and treatments have been applied in the name of defensive medicine.
The followup question is, how much defensive medicine is necessary? If there's a 5% drop in that practice then do the costs from lawsuits go up to compensate? Are we at an equilibrium point, or are doctors doing defensive medicine because the myth of the power of a lawsuit is so strong?
I am a physician, and I teach in a medical school. Although they are 2% of total costs, they drive up the cost in unnecessary procedures that patients demand without medical indication. Those $1080 MRIs are often ordered to avoid a lawsuit. That adds up to a lot more than 2%.
I'm a doc based in the UK. I know that we order fewer useless investigations than you do in the US. Thankfully we don't have a litigation heavy medical culture yet. Although, I think it's slowly heading that way.
My dad is a surgeon, so that's my appeal to authority and anecdote. In my country litigation isn't a problem, but unnecessary treatment is. People go doctor shopping to find one that gives them the treatment they want. Same problem, different cause.
As I understand it now, doctors have largely invested in testing companies. When they (not all doctors obviously) - I probably thinking primary doctors - order tests the test is a money maker for the doctor.
Wouldn't a calculation of the effect of litigation include the scenario you mentioned? Otherwise it would seem to be a bad calculation. Do you have any studies that show how often a test is ordered simply to avoid a lawsuit?
I agree that the second link is saying more about the effects from malpractice reform. I have seen the Kaiser study, and what I think they are not taking into account is the culture of defensive medicine that may physicians don't even think about. For example, an MRI is more likely in a US Emergency Room than in a UK Emergency Room. UK practice is (in general) evidence based, and they won't order it unless it makes sense to do so. May US physicians would not identify this as "defensive" because the practice is so widespread, although the root reason for ordering it stems from that cause. I am not aware of an analysis that takes this into account.
I only read the abstracts, so correct me if I'm wrong, but both of those links fail to compare the US with other countries. I.e they don't show that costs in America are higher than other countries due to defensive medicine. It could be that all countries have higher costs due to defensive medicine, we wouldn't know from these studies.
Yeah but 2% of a very high cost is higher than it would be if the cost is lower (obviously). Of course you won't cut the costs much by targeting those 2% at first, but if you ever get to reasonable prices those 2% would transform in 7% and 7% is starting to be notable.
I believe there to be a more concrete cause of US healthcare costs: collusion between insurance companies and healthcare providers. "Insurance" includes both health insurance and malpractice insurance, as well as "providers" being hospitals/doctors and manufacturers of equipment and drugs.
I think what all of these countries have in common is that they have a strong entity negotiating prices on behalf of the patients, drastically lowering the price, and to a varying degrees also dictating what treatment is appropriate.
It'd be really nice if health care could work like a regular market, but evidence and intuition suggest it simply doesn't. As others have commented, people don't comparison shop even if they could. It's a bit like having no idea how a car works or what could be wrong with it, and then being asked to pick the best mechanic and strategy to fix it. Except of course, that it's not a car but your life or somebody else's depending on the right choice. I think it's unrealistic to expect a working market economy to develop under such circumstances.
One or multiple big entities negotiating prices and dictating treatment comes at the cost of less freedom for the providers and also less freedom for the consumers. Whether it gives better or worse care I wouldn't be too sure - on the one hand, special cases won't get specialised treatment, on the other hand trusting the decision of what needs to be done effectively to the provider sounds like it will cause over-treatment.
The freedom aspect probably drives the USA to the current system, but given the measurable effects, it just seems like bad policy.
I think what all of these countries have in common is that they have a strong entity negotiating prices on behalf of the patients, drastically lowering the price, and to a varying degrees also dictating what treatment is appropriate.
The US has these entities too - they are called "insurance companies".
As others have commented, people don't comparison shop even if they could.
This is simply false. People with low deductible insurance don't comparison shop because they have no incentive to do so. I have no insurance (my startup is minimally funded), and I do comparison shop.
It's a bit like having no idea how a car works or what could be wrong with it, and then being asked to pick the best mechanic and strategy to fix it.
Here is what I did a few weeks back. I went to a doctor who ordered an MRI. I called around, discovered the price of MRI's varied from 5-7k (INR, not USD), and then picked the closest one to my home (the price difference was small enough that I didn't care).
When it came time to get treatment, I did research on the internet, as well as asking three separate doctors. They all independently had the same recommendation - microlumbar discectomy on L5-S1. This was fairly apparent based also on the pattern of pain I was suffering, and just by looking at the MRI. I ruled out one hospital because it seemed dirty, chose a doctor/hospital to have it done (not the cheapest, but not the priciest), downgraded from a deluxe room to a private one , and got myself fixed up.
This doesn't work for emergency medicine, but most medicine is not emergencies.
 The default over here is to give white guys the gold-plated options.
Do you have evidence that you are normative in terms of comparison shopping for healthcare? It seems to me that costs won't vary much between providers and that comparison shopping would be a mostly useless thing to do in the U.S. Indeed, your own experience in comparison shopping is that the price differential was not that great.
Health insurers in the U.S. have a captive audience. Most people before the age of 60 who have insurance get it through their employer. What the employer pays for insurance comes out of money that would be paid in salary. It seems to me that the insurance companies don't have a great incentive to lower cost of healthcare. On the surface the evidence suggests that they haven't since procedures cost so much more here than elsewhere.
I don't live in the US, but India does have a health care system fairly similar to the US. The biggest difference is it has less red tape than the US, and insurance companies play a minor role. Most people pay out of pocket and comparison shop.
Costs here did vary significantly for the surgery - the dirty hospital was 0.9-1.5lac (depending on general ward vs private room, etc), the place where I had it done was about 85k. It was the MRI for which the price differential was minor.
I was actually pretty surprised that the price gap was so big - I wouldn't have expected the city hospital to be almost 2x as much as the private hospital.
It seems to me that the insurance companies don't have a great incentive to lower cost of healthcare.
Insurance companies don't have a great incentive to lower the cost of their biggest expense? Um, ok.
On the surface the evidence suggests that they haven't since procedures cost so much more here than elsewhere.
The relevant counterfactual is what procedures would cost absent insurance company negotiation, not what they would cost if US patients had as few MRI's as French patients and US health care workers were paid as little as their French counterparts.
And then ignoring most of the others, like the truly colossal difference in money spent per capita and the fact that the public health system, while so chronically underfunded that it is unable to do it's job, is at least nominally charged with trying to provide a free universal service paid for by taxation.
Insurance companies don't have a great incentive to lower the cost of their biggest expense? Um, ok.
They only have such incentive if it increases their profit margins. There are a number of scenarios where this wouldn't be the case. They aren't interested in lowering cost just for the sake of lowering cost. I don't have data either way and so my belief in this is easily shaken.
I'm confused, could you name a situation in which this wouldn't be the case? The profits that an insurance company makes are the amount it charges for its services minus the amount that it pays out, it seems that reducing the amount they pay out would necessarily increase profits.
I'm not aware of any insurance companies that charge on a cost-plus basis, and the insurance companies can't just charge companies as much as they want (or else they'd charge an infinite amount).
One situation: if they believe that their competitors will follow suit. Unless an insurance company concocts a way to lower costs that isn't easily replicable, they have little incentive to do so. Otherwise, they're just triggering a race to the bottom.
Or maybe there's nothing wrong with my logic. Maybe there are other forces at play that, when all mixed together, result in companies sometimes seeking cost reductions, and sometimes not seeking cost reductions.
Parent was looking for an example to explain a possible situation, not a dynamic that the entire world must obey at all times.
> The US has these entities too - they are called "insurance companies".
As mentioned in the article, American insurance companies appear not to be very good at negotiating prices, partly because the providers are permitted to negotiate different prices with different companies, and to treat these negotiated prices as trade secrets. This is a highly unusual state of affairs.
So you are saying that US insurance companies are dramatically lowering the prices.
If so, then compared to what exactly?
The US has some of the highest costs per treatment of just about anywhere in the world, so if the insurance companies are dramatically lowering prices, then the only conclusion I can draw is that the US healthcare providers must be powering all their equipment by burning money for fuel or something.
They are certainly lowering the prices, hence the constant back and forth (literally for 30 years straight) of local market consolidation between the buyers (health insurers) and the suppliers (hospitals/physicians). There are legal fights going on all over the country because of all the pricing issues; Pittsburgh is a great example of how the dominant insurer (Highmark) simply refused to pay the dominant provider's (UPMC) price increase. Highmark's solution? Vertical integration and just buy the other local health system.
In terms of MRIs, you have some odd effects with pricing, particularly when the MRI is seated inside of a massive tertiary care center instead of a standalone facility. If you look at the pricing discrepancies, it is almost always related to getting the MRI done at an academic medical center versus one of the ambulatory care centers. The problem is actually pretty simple: hospitals are terrible at cost accounting and totally game it. Instead of taking the leasing costs over the expected uses of the machine, adding in time for the technician and a bit of a real estate or facility charge, they allocate hospital costs (from all departments/overhead) to services based on their expectations on what they can charge. Michael Porter and his staff at HBS are looking at this right now.
Further complicating MRIs (I'm not sure if this is included in the study's cost estimate) is that radiologists essentially operate in a cartel fashion. They are rarely, if ever, employed by the hospital (like most doctors), but band together and set outrageous prices for reading images. Radiology, despite being non-patient facing and limited liability (they render opinions to other doctors, not patients), is one of the most lucrative medical trades. Eventually, traditional radiology should give way - either through disruption (overseas or computers) or by other doctors simply saying why the heck should a radiologist get money for reading an image I can read myself and will then have to intervene on anyways?
Startups have emerged in price/transparency space (e.g. Castlight Health) and will hopefully start to put pressure on hospitals/physicians to actually compete with one another and bring down costs. Since they have so much local market power, there is only so far an insurer can go without owning an entire market.
>The problem is actually pretty simple: hospitals are terrible at cost accounting and totally game it.
It's not that they're terrible at cost accounting. The problem is the hospitals are required to provide care to people who can't pay, particularly in the ER and obstetrics. So costs are shifted from other departments to pay for these services.
That's why people who are trying to hold down costs by zeroing in on this test or that procedure are destined to fail. Somehow the service the hospital is required to provide without reimbursement will have to be paid for, either explicitly or through the sort of sleight-of-hand accounting we see today.
So if they have been lowering prices for 30 years, why do the prices keep going up?
I know there are increased costs due to medical advances, but this only accounts for half the increase in costs according to studies, so the rise from 5% of GDP in the 60's to 16% of GDP today, especially seeing the massive increase in GDP during that period, does not chime at all with the idea that the insurance industry is lowering prices in any meaningful way.
In fact, any rational observer might well assume exactly the opposite.
My comment should have said that absent insurers over that time period, prices would be higher than they are currently. The effect they have is on controlling the level of price increases, not on lowering price absolutely (which I doubt is possible if people wish to keep extending their lives).
I am not saying that insurers are the most effective option or advocating for them; I am only saying that without them, prices would be significantly higher.
If you need evidence, simply compare the total price of any health care service (i.e. total cash outlay by all parties) between a person who carries health insurance and a person who does not. Universally, the price of the service is higher for the uninsured as they lack negotiating power.
We have had such comparisons for MRIs posted on this thread already, given as examples of prices being much less at facilities that do not deal with insurers at all.
While I would agree that having buying power should bring down prices, this can be completely outweighed by the middleman trying to maximise profits. If prices are kept high, for instance, then you can make more money per person, so therefore having less administrative overhead per dollar made and so more profit margin.
For a non-medical example of this, just have a look at Apple, who make tons more money than their competitors, despite shifting less product, by simply ignoring the bottom end of the market.
The premiums set by American insurance companies will be largely driven by the cost of the services they provide. If they get providers to lower costs, then insurance premiums will decrease across the board, both for that company and their competitors. They can negotiate small discounts in their own individual favor, but large measures that truly cut costs and not just prices will impact everyone. As such, there's no real reason for insurance companies to negotiate for lower costs, since competition will ensure that their premiums decrease by a similar amount and they don't make any more money. Since demand for health care is pretty inelastic, they won't gain substantially more custom by lowering prices, thus they have no reason to try to substantially cut costs..
> good health care arguably is more important than limited government power
Of course, even that only applies if increasing government power will even improve healthcare (in the long and/or short run), and if increasing government power won't have ancillary negative effects that counter the improvement in healthcare.
Don't forget that in Canada it's illegal to be a private medic. Medical services are ostensibly free, but rationed through queues. If you have a medical condition that's not immediately threatening, you may find yourself waiting for years for treatment, or have to go across the border to buy it.
That's not correct. There are private clinics who essentially claim the costs of their services from the government as though they were an insurance company. Costs that can't be recouped in full are passed on to the consumer or insurance providers, or you can be referred to a public hospital where the same service may be provided for free.
As for waiting times, you may find yourself waiting for years but it's highly unlikely. The median time for surgery in Canada is 4 weeks.
As a Canadian, the stuff that I see other people telling _me_ about my healthcare system makes me upset.
As others have said, it's not illegal to be private in Canada.
Everyone who seeks medical attention at a hospital is sent through triage, you are right. If you don't have a life threatening problem you won't be treated first, but saying "sometimes people wait a years for treatment" is just hilariously misleading.
Canada has a public health insurance program. Medical services are privately provided except for hospitals which usually are partially government subsidized on top of the health fees due to the high capital costs of building them.
That's not a requirement of such a system, though; France has a dual public/private system, where everyone is guaranteed service at the public system, but well-off people who wish to pay extra can purchase private care.
That's true of the UK system too. People get public treatment, but can go private if they wish. There are some restrictions on novel cancer medications if those are shown to be both expensive and minimally effective. I don't know if it's a good thing that dying people are protected from high pressure selling of pharmaceutical companies or whether the government should just allow people to spend tens of thousands of pounds on medication that may not extend their life and may not improve (and may decrease) their quality of life for the remaining weeks they have.
I've used VA health care. It is awful. AWFUL. Let me explain using an analogy. What do you think the quality of care would be like if doctors could not be held accountable for their actions in a meaningful way?
"the United States is Cambodia or Burkina Faso or rural India, with access to a doctor available if you can pay the bill out-of-pocket"
Although it dovetails with the well worn narrative on HN, this comparison fails due to the level of care.
Also, from the article comments:
"There are just a couple problems. In 2009, the French Society of Radiology equipment in France was critically undermining care, and the government was refusing to increase capacity, even though people at many emergency rooms couldn't get an MRI even if they needed one because the equipment simply wasn't available. So, yes, the French government has held down the price of MRIs in France...by not purchasing enough MRI machines that one is available at every hospital. If you need an MRI in France, you're rolling the dice that you would be able to get one in a timely fashion.
Second, some of the development of MRI technology happened in Britain. Most was performed in the U.S. Who is paying for the cost of development of this and other new technology and drugs? It's often not the people in places like Canada and France, where government controls hold down prices. Most of the cost of research and development is paid for by Americans. We pay perhaps five times more in the U.S. for some procedures than people in France pay, but the technology might not exist in the first place if we didn't pay this disproportionate share. Once the technology exists, companies keep charging as much as they can in the U.S. to recoup costs and to fund development of the next big thing in medicine, and meanwhile other countries in the world adopt the technology, gaining benefits from it without actually paying the costs. This is Canada, France, and much of Europe. Plenty of medical research goes on in these countries, but American consumers ultimately bear most of the cost. It's an unfair system in many respects, but it's what has kept medical research moving ahead for the last several decades."
> Although it dovetails with the well worn narrative on HN, this comparison fails due to the level of care.
The context is purely the model of provision; level of care isn't addressed.
> Second, some of the development of MRI technology happened in Britain. Most was performed in the U.S. Who is paying for the cost of development of this and other new technology and drugs? It's often not the people in places like Canada and France, where government controls hold down prices. Most of the cost of research and development is paid for by Americans. We pay perhaps five times more in the U.S. for some procedures than people in France pay, but the technology might not exist in the first place if we didn't pay this disproportionate share.
This is an interesting point, in that much of the technology is actually developed outside the US, but the very high prices which Americans pay may be funding some of the development. That said, drug companies, for instance, only spend in the region of 12% on research, less than they spend on marketing. This marketing spend is disproportionately targeted at the US, as it's one of the few countries which permits heavy marketing of prescription drugs directly to normal people.
In a way this can happen (though i'm far from being sure it actually does...): the medical area is one where the prices are the most regulated. In the public sector the prices for an MRI are probably very largely fixed by the government (and more probably completely) and given that even in the private sector you need an authorization to build an MRI counting them mean the medium price will not increase too much and the public operators might have less arguments to ask the government for price increase. Of course that would maybe not destroy effects of offers and demand and I don't know which one would win in the long term. But remember that health is a very different market than commodities and trying to compare the economics of health vs. crews and bolts by using crews and bolts theory might not going to work well.
The lack of MRI is a big problem in France anyway. Regardless of the effect on prices (except maybe if they triple or something like that) having 100% more would be a lot better.
It's not difficult to figure out what happens to a marketplace when you remove the competition with government mandate. America's health care system has been hyper regulated for decades. You can't even shop across state lines effectively.
We have the worst of both systems. We have enough government interference to drive up prices through restriction of competition, bad regulation, bad mandates; and we have government sponsored 'private' entities there to capture the high prices from the stagnant and controlled markets.
Of course, all of the countries with good health care have more regulation, not less. (Yes, even in Switzerland.) Do you know of any countries with minimal health care regulations and good outcomes? I suspect they don't exist, because the preconditions of a functioning free market do not exist for health care consumption (rational consumers, symmetry of information, consumer choice, etc.)
Of course, all of the countries with good health care have more regulation, not less.
All you've identified is that rich nations have good health care regardless of how much regulation they have. This is hardly surprising - the evidence suggests that once health care exceeds a certain minimum level, it has little effect on health outcomes.
Incidentally, the Indian health care system is excellent and less regulated than the US one. I'm very lucky that I blew out my back in over here rather than in the US. I didn't come over here as a medical tourist (my startup is in Pune), but I strongly recommend that more people consider it.
Granted, the vast majority of people here are too poor to use the health care system effectively, but that's not the fault of the system.
Similarly MedLion (http://www.medlion.com/) provides primary care in Santa Cruz and Silicon Valley for $59/mo + $10 visit in part by not accepting insurance (they claim on their website it saves them 40% in costs).
Insurance works great for catastrophic things, just like car insurance and then it clearly makes sense to make it universal. If you could only buy gas through your car insurance--who occasionally would decide you drive too much and not cover this months' gas--you can bet prices would go sky high.
I'm all in favor of universal health care, but having universal (private) insurance without a collective bargaining system raises a lot of problems. For example, here in Italy car insurance is mandatory, but people choose where to make their car repairs, and prices aren't regulated in any way. The results: Once I went for a repair, and got quoted something like 150€ - I told the repairman I thought I was covered by my insurance. Then I discovered that particular problem wasn't covered, and well - the prices magically came down to 70€ "You know sir, with insurances we have all those additional costs...".
"You know sir, with insurances we have all those additional costs...".
Well, with many insurance companies there can be an additional cost. Submitting the claims, filling out the paperwork, proving the work was done, etc... all add up. Depending on how much work a person does with an insurance company it could easily add up to another full time employee.
> "You know sir, with insurances we have all those additional costs...".
Two possible issues here. First, it _does_ cost more to reclaim payment from an insurance company than to get it from the consumer. There are the forms to be considered, and also the fact that insurers often pay substantially in arrears. Also, did you end up paying cash? Some providers of services like this will prefer a cash deal, as they do not necessarily plan to declare it.
As someone who had insurance that doesn't help me. I might not have a pay out of pocket for an MRI but I'm still having to pay for it through higher charges. I'm unable to shop around to reduce the insurance company's (and therefore my own) costs.
The article completely ignores structural problems that lead to high prices. Since the US health care market effectively has government price controls (due to Medicare, which is a huge percentage of revenue for most facilities), this causes some perturbations in the market.
Pretend you're an optometrist. Historically you got paid well for your time, so you organized your business around seeing as many patients as possible and referring out things like labwork, glasses-making, etc, since you couldn't compete on price with shops that kept their capital equipment busy nearly 24/7. Life is good; you get paid well for your time and your customers get reasonable prices on things like labwork, glasses, etc.
Over time, your medicare rates keep dropping. Eventually you actually start losing money when you see medicare patients. You then realize that the labwork/glasses part of the business is pretty high margin, and even if you buy a machine and keep it barely busy, you can still eek out some profit from keeping that work in-house. So you buy some equipment, and instead of referring out labwork and glasses, you start doing it in-house. Again you can finally make money on medicare patients.
The medical device companies LOVE this. What better way to expand your market than "invest" (ahem lobby) so that your customers can make money with machines that are only busy 30-50% of the time. That's 2-3x as many devices as if they had 95% utilization, WIN! The doctors won't complain, b/c the system is so messed up that they know it's the only way for them to actually make money. And the insurers can't really do much about it b/c they can't force their patients to go to a different facility as that's too intrusive.
So it's kind of a combination of market failure, lobbying, and price-fixing that causes procedures to be way too expensive in the US since the normal market mechanisms that cause prices to approach a small margin over the cost at high capital utilizations to fail.
There's a lot more to it than that, but whenever I talk to my many relatives in the medical industry, this is always happening, and it's a major factor in prices. MRI machines aren't cheap (think $1M).
And never mind the huge monopoly granted to AMA certified physicians, in terms of providing medical care. Of course those guys have a huge incentive to keep as many people out of the physician pool as possible. We certainly couldn't allow competition, which might drive down costs. :~(
There's no specific provision disallowing immigration of doctors. For obvious reasons it's an occupation that requires licensing/certification, which is more cumbersome than many are willing to consider, and reasonable English, which is usually not a priority in medical schools around the world.
Not only do Americans spend more per-capita on health care than Canadians, the American government spends more per-capita on health care than the Canadian government. And yet Americans still need private medical insurance. And depending on how you count, more than 60% of American bankruptcies are for unpaid medical bills and about 78% of those people had medical insurance.
Having lived in Canada for 10 years, and recently moved back to the US because of health care, I can attest that while Canadian health care looks good on paper, it's not. Sure, it's there when you need immediate emergency care. But for anything long term, it's horrendous. Autism, for example, is a perfect example, and something I know first hand. In Quebec? The best thing you can do for autistic children is to leave and get out of there. My wife, a Canadian, was afraid when she first heard about US healthcare, but when she finally got to experience first hand the full brunt of the system, she despised it. We had more help for my son in the first 2 weeks of being in the US then he'd had in more than year fighting for it in Canada.
To top this all off, Canada still has private insurance, and while you don't need it, if you don't have it, it makes for much lower quality of care (and don't think the public option covers essentials, either).
So, no. I could never put my sons through a system like that again. It was down right abuse, and I don't use that word lightly.
Having lived in both countries, my experience in the U.S. was less than ideal. About the same amount of wait times as in Canada, and the doctors I saw gave me very little options as to how I could treat one of my chronic injuries. Never suggested a follow up appointment, physio, or even x-rays/MRI's to get a better look. In Canada, they recommended me a specialist, and I have a nurse at a clinic who has built a great relationship with me to assess my needs when I need help, as well as x-rays/MRI's done within a week.
My experience isn't like all in Canada or the U.S. but after touting how much better I thought the U.S. would be because of my great insurance and living in one of the top cities in the country, I wasn't impressed at all.
Different strokes? Yeah, that doesn't mean what you think it means.
Regardless, it's great that you have a happy story to tell. It's mostly meaningless. The original point is, Canada's system isn't better. It's just another system, with it's own problems. I mean, do you really think your story will change the facts of mine? Does it matter? No.
And, to top this all off, you try to equate "not being impressed" with abuse? Really?
I once had to have a CAT scan done. I was really scared. I asked how much it would cost. No one was able to tell me! I was told the price would be negotiated with my health-care provider, if they opted to cover the procedure.
How can there be competition when no-one can give you the price of the procedure? Seriously WTF.
This is because no one is quite sure what it should cost. Literally. The hospital will try and charge whatever wild number they can get away with, and the insurance company will negotiate it down to whatever they feel they're willing to pay.
My wife is a nurse and has seen this play out multiple times with patients and their families. Just to give you an idea of how disconnected the price is from logical factors, consider this - If the hospital bills the insurance company they might charge $1000 for the scan. If they bill you directly, (always after you've had the procedure of course), you will be charge much much more, say $3000.
Why? Because it's next to impossible for you as an individual impossible to negotiate the price before hand. (How would you know what a fair price is? And are you really go to say no to a procedure that might be critical for your health?)
People argue that the current system works because capitalism is more efficient. But when the prices are hidden from the customer by either fudging prices or hiding costs behind a fixed fee in the form of insurance the system is broken.
This seems to be one of the fundamental misunderstandings people have about capitalism; they like to think of it as a form of virtuous economic freedom. A market system, however, only works with reasonable information. In this case, it is apparently of benefit to the providers to treat them as trade secrets, but the system will operate more efficiently if they are forced not to do so (as they are in most places).
High health care spending is yet another way the US subsidizes other countries. From the article:
"This is a good deal for residents of other countries, as our high spending makes medical innovations more profitable. “We end up with the benefits of your investment,” Sackville says. “You’re subsidizing the rest of the world by doing the front-end research.”
In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?
> In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?
Er, yes, _many_. See some of the recent work in HIV and cancer drugs, for instance, along with many more conventional drugs. It _is_ true that pharmaceutical companies (most of which are, these days, highly multinational) derive a lot of their profit from the US market, but they spend a lot there too; the industry spends more on marketing than research, and this is disproportionately targeted at the US, as it's one of the few countries where one may advertise prescription drugs directly at the general public.
> Of course the MRI machine was itself invented in the US
Hmm? Very arguable, that one. While its medical application seems to have been the product of an American academic (note, academic, not medical device company employee), NMR imaging (renamed MRI for medical purposes, presumably due to the unpopular word 'nuclear' in the original), was previously made feasible through work at the University of Nottingham, in the UK.
Like many inventions which came as a series of parts, it's rather hard to point and say 'Mr X invented this'; there are at least two American contenders, one British, and one Soviet.
"In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?"
Of course there is plenty of good medical stuff coming from many countries other than the USA. The market for medical care world wide is way larger outside the USA too. Finally, much medical research is multi national and collaborative.
A fact I find distressing is that the poster is largely correct. Somewhere around 70% of biomedical R&D is done in the US, the utter dominance of the US in this market is not controversial. Most of the rest is done in Asia. The biomedical R&D done in Europe is rapidly approaching a rounding error. I, for one, do not like the fact that the entire world is dependent on the biomedical R&D of US companies. Yet that is the current state of affairs. And the private companies in the US spend money on this research that dwarfs what all but a few countries spend.
I wish more people would acknowledge this reality. I like biomedical technology advancement. Most of it is developed in the US because it is the one of the few countries that can absorb the cost of the R&D. If the US stops doing it, who is going to pick it up? There is ample evidence that the answer is "a little bit in Asia and nowhere else". That should be frightening to people. Biomedical R&D is important.
Ignore for the moment that the US healthcare system is a wreck. The fact remains that the majority of biomedical advances come out of the US because it is the only country where people absorb the R&D cost. If Europe was pulling its weight with biomedical R&D it would be one thing but in practice it is producing so little in that regard that it is kind of shameful. If we eliminate US biomedical R&D by eliminating their ability to recover costs, who picks up the slack? There are no easy answers.
Bullshit. Show me where you get this 70% figure from? Are you talking about spending or results? I think you pulled it out of your arse, but would love to know. What I found was, European r&d spending is close to what the USA spends. Individual countries spend more as a percentage of GDP than USA. World wide, USA does not appear to be spending anywhere close to 70% of the total on medical r&d.
* 2011 Nobel prize for medicine went to an international crew (2 from europe, 1 USA)
* 2010 Nobel prize for medicine went to a British man.
* 2009 2 women from the USA, and one man from UK.
* 2008 1 german man, 1 french woman, 1 french man.
Anyway, medical care isn't just about what drugs multi national companies produce (with much funding from Asia and actual research done in Asia and sales done in USA+worldwide). It includes things like reducing obesity, stopping people smoking in bars, and providing good medical care for all people - which reduces sickness spreading. It does take research, and development to figure these things out and implement them on a social level successfully. Many of these things are classed as social science, and not included in R&D in many places. They can't even get R&D funding for this stuff in some places because it is not real science apparently.
Tax credits for r&d also distort the real costs. The UK gives 225% r&d tax credits, and Australia gives 175% tax credits of the cost now(USA has them too, but lower). This means you make money purely from just doing the R&D without worrying about the results.
btw, the USA is massively in debt, and over 22% of US companies being foreign controlled. So even if the US companies were contributing that much R&D, shouldn't that proportion be attributed somewhat to other countries? With all the funding into the USA also coming from other countries, shouldn't some of that be counted towards the other countries? Shouldn't the fact that lots of the workers in R&D labs for US companies have been outsourced to other countries count towards those countries?
The Nobel Prize is for basic research. Once you've done the basic research, you're still looking at spending huge amounts of money, on the order of a billion dollars, and spending 15 years bringing it to market. The drug industry is in trouble even as it is, and obviously they would be in worse trouble if they had to sell as cheaply in the US as they do in the rest of the world.
>So even if the US companies were contributing that much R&D, shouldn't that proportion be attributed somewhat to other countries?
No, at least not for that reason. The important thing is not where the innovator is located, but what market they target.
the entire world is dependent on the biomedical R&D of US companies
Inasmuch as it is possible for companies of this size to be from any one particularly country, large American pharmaceutical companies spent $27bn on R&D in 2009, while European ones spent €28.5bn (i.e. 40% more at today's exchange rate.)
That list does not show where the money is being spent by each organization.
This is irrelevant to the claim I was debunking.
True, the great grand-parent post appears to be conflating where the research was done with the nationality of the company funding the research, and I admit that I only responded to one half of the argument, but that was purely because it was the easiest to fact-check. That doesn't make the other half of the argument true.
Specifically, consider Bayer. This is listed as a German pharmaceutical company.
"American" pharmaceutical companies also have employees in Europe, Asia, and elsewhere.
Better statistics are provided elsewhere in wiki, for instance US R&D expenditure dwarfs that of any other country.
Including, say, military and aerospace R&D with healthcare R&D to try and make a point about just healthcare is clearly ridiculous.
"In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?"
I know I'm falling for a troll, but even if that number was right, what would be the number removing drugs for mostly purely American issues (drugs for dubious illness like ADHD), drugs for American lifestyle issues like obesity and its consequences (diabete, impotence...)
If your are looking at cure for e.g. pandemics the picture is very different, with Europe very present and emergent economies tackling problems deemed non-economically viable by American companies (e.g. various mosquitoes born disease).
Medical research spending in the US is approximately $500/person/year. The medical cost gap between the US and other countries is approximately $3,500/person/year. R&D spending simply does not account for for anything close to the huge discrepancy in costs.
You're missing the point. High prices for drugs, procedures, and medical devices in the United States are what makes their development financially feasible. Without the American market, the expected payoff to new medical technologies would be much lower, so it's reasonable to believe that fewer would be commercialized.
Americans bear the bulk of these costs, which are passed along in the price of their treatments, because much of the rest of the world has instituted price caps that are too low to cover the full cost of R&D, from basic science to a product approved for sale. (These treatments are nevertheless available in other countries because the marginal cost of synthesizing a pill or building a device that's already been developed is low.) It's a classic free-rider problem.
It really amazes me how there are controversial topics where one side never presents any actual facts or figures to back up their stance. I would think that, in the absence of any hard evidence, the controversy would disappear. Yet it seems that anecdote and rhetoric alone are enough to sustain extreme controversy. Both health care and climate change in the US are excellent examples of this.
Edit: the statement about R&D costs is one excellent example of this. This thread is not the first place I've heard it, by any means. It's inevitably framed as the US subsidizing the rest of the world but without any quantitative analysis of it. The assertion evaporates when you actually look at the numbers, of course. Another excellent example was when my father claimed, no doubt prompted by right-wing talk radio, that the life expectancy gap was driven by the much higher murder rate in the US compared to European countries. Upon plugging in the numbers, I found that, assuming an absolute worst case (every murdered American is an infant, losing all ~80 years of life), dropping the US murder rate to zero would increase American life expectancy by six months.
I get how people can be wrong sometimes, but the way it spreads, the way people hear things and never check them or even apply a basic smell test, and the way these complete falsehoods manage to shape national debate is just crazy.
Medical R&D in the US amounts to about $100 billion/year. (I misremembered a slightly higher number previously, but the ballpark is the same.) Meanwhile, the US is spending in the neighborhood of $1 trillion/year more on health care than if spending were on the same level as a typical European country. Yes, I understand that those R&D costs get baked into medical costs, but they simply don't account for the vast majority of the discrepancy.
If the US system cost the same as a typical European system with the exception of US R&D spending on top, the discrepancy would only be around 10% of what it actually is.
Your 50 years is a radical exaggeration. America had a budget surplus and stable dollar 12 / 13 years ago. Which is why gold was $270x / ounce, and oil was $12 to $20 and gasoline was still $1.
Trade deficits are mostly irrelevant so long as you aren't accumulating debt, and your domestic economy is highly productive.
I run a huge trade deficit with Amazon.com for example, as do all of their customers. That's ok because I'm being productive elsewhere, and the profits I'm generating through work make it possible to run that deficit. The same concept works at a macro economic level.
America ran trade deficits during almost the entire 19th century. There was more money (eg British investment) and goods flowing in, than out. The huge profits being generated domestically by the productivity gains, made it possible to finance that deficit without debt accumulation.
Gov't budget and import/export of currency has nothing to do with each other.
Current account deficit is what I wanted to type, not only trade. It works like this since Bretton Woods (okay, 40 years ago): US has current account deficit, that means that US dolars (or bonds in USD) are collected by other countries, and the US receives physical values (traded goods, raw materials, etc.) in return. When the USD loses value vs other currencies, the other countries posess now less value, because the USD they own is worth less physical stuff/other currencies.
The US is trying hard to do the same thing with China currently, since China has bunkered some 3 trillion USD. Devalue the USD a few percent vs the Renminbi and the US has saved a lot of value it would otherwise have to "pay back" to China some day.
Its a good thing to run the leading international currency (ie the USD) because of the implicit value transfer to your own country.
Interesting seeing this here on HN after my wife and I just finished watching "Frontline: Sick in America" on Netflix tonight, in which an American reporter travels to 5 countries that provide some form of universal healthcare to discuss (with doctors, administrators, and patients) the different mechanics, what percentage of GDP they spend on healthcare, what wait times and gate keeper policies are like, what financial issues exist, etc. The fixed, negotiated price for MRIs was one of the things he discusses. (http://movies.netflix.com/WiMovie/Frontline_Sick_Around_the_...) I grew up with nationalized healthcare, but found the documentary quite informative.
MRI specifically is overused and kind of crappy in Japan. In the rest of the world, the standard is for a 1-3T MR study; in Japan, you get a lot of 0.5 and even lower (0.2T! wtf) MR studies. They're used for a lot of health screenings, whereas in the rest of the world they're more often used for actual problems.
I call bullshit on your first point--that MRIs are "overused" in Japan.
MRIs aren't something that can really be overused. Unlike CT scans, or pretty much any non-MRI method of imaging the inside of the body, they don't harm the patient.
Even though you are right that many of the MRI machines in Japan are lower-resolution cheaper models, that is largely because there are way more MRI machines here, and they are used for routine diagnostics, to find actual problems. Your local single-doctor clinic in the boonies often has mRI equipment here.
I have a personal interest in this topic, as I have MS. Lucky for me, I am doing fine, but in Japan I get a brain MRI every 6 months just to keep an eye on how it is going. When I was back in the states 3 years ago I had a typical employer-based HMO. I went to the doctor and told him here's my deal, I have MS, my doctor in Japan said I should have another MRI in October to see what's up with it.
The doctor flatly refused -- MRIs were only available after physical symptoms had developed. Of course, at that point, the available treatments for a flare-up of MS are less effective at preventing long-term neurological problems. (Happily, I am back in Japan now.)
My point is that MRIs are a wonderful tool, and as you and other commenters have pointed out, they are much more widely used here than in the US. Something wonky with your knee? OK, let's get an MRI and check it out. I don't see anything wrong with that.
And in cases where there is a problem, there is no difficulty at all here in getting a referral to a specialist at a hospital with the latest cutting-edge MRI gear if necessary.
Using MRI technology for health screening and preventative/proactive treatment is great.
>MRIs aren't something that can really be overused.
Not on the basis of exposure to anything dangerous, but certainly they can be overused on cost grounds. That is the case in the US. They are routinely ordered without an adequate indication; we order many times more than physicians in other countries.
> Something wonky with your knee? OK, let's get an MRI and check it out.
Maybe; let a doctor look at it and decide. An MRI may be useful. It might just provide complex hard to interpret images that don't provide any more information than an experienced orthopod could find with some manipulation.
> Using MRI technology for health screening and preventative/proactive treatment is great.
You need to provide some evidence for that claim. There's a number of flaws.
Giving everyone screening MRIs needs many more staff. Those staff are diverted from other areas of healthcare, so that's one negative impact.
You'll get bottlenecks in screening and interpreting results, so some people who need treatment may end up waiting longer than someone who's just getting a screening MRI.
MRI scans are complex and hard to interpret. Knowing that every MRI is called for by a doctor makes people screening them look hard for problems. Knowing that there's a bunch of screening of probably healthy people means that screeners may not look so hard, and may miss minor (or major and hard to see) problems.
A patient who is healthy but who has a blob on MRI will be under considerable stress until that blob is investigated and ruled safe.
Investigations carry some risk. You have to drive to the hospital (which will cause many deaths and injuries); you're mixing with ill people; you're increasing the number of people visiting hospitals and thus increasing the numbers of people with MRSA and NORO virus and etc visiting hospitals - you're increasing the number of healthy people carrying illnesses visiting hospitals which have people unable to resist those illnesses.
That's just off the top of my head. I'm sure there are many more problems.
But I don't have numbers, so I can be persuaded if someone has good quality reports.
All the rads I've talked to/worked with hate "screening" MR (or CT! Some morons do CTs for random checkups!) not so much for the cost of the procedure (since they directly or indirectly were getting paid), but because it leads to finding basically insignificant incidental findings which then cause the patient to worry, and/or have unnecessary surgery. The benefits are questionable if anything, but the costs of the unnecessary surgery are high.
A needs-based study based on having MS, sure, but just getting an MRI as part of a routine checkup, probably not.
Exactly this. Unnecessary imaging needs to unnecessary follow-up evaluations like biopsies which in turn have additional complications.
When I was in med school we spent a lot of time in a hospital providing indigent care. We ordered tests that we needed to determine how to treat someone, but not more than that. When I worked in a private hospital, most patients got lab tests done daily, with no specific reason for ordering them.
I'd be willing to buy that imaging is sometimes underused with some patient populations, and sometimes overused -- just like medications, even painkillers, which are dramatically overprescribed in some places (old people, Florida, pill mills for diversion) and underprescribed for others (some chronic pain patients, terminal care).
Now, what if imaging were free ... wouldn't the solution be to use it all the time but fix the tendency to over-treat harmless irregularities/growths, rather than using it selectively? Or is fear-of-malpractice preventing this?
"The doctor flatly refused -- MRIs were only available after physical symptoms had developed. Of course, at that point, the available treatments for a flare-up of MS are less effective at preventing long-term neurological problems. (Happily, I am back in Japan now.)"
There's your mistake. You didn't see a doctor who owned (or who had bought a share in) an MRI machine. Those doctors are 4.2 times more likely to refer patients for MRI than doctors who don't.
From what I've been told (I used to do research in MRI), it's because MRI's are Japan's preferred method for allowing doctors to show they care.
MRI's are used in Japan the way antibiotics are used in the US. Patients are often unsatisfied if the doctor tell them to go rest and hope things improve on their own (even if that is the best treatment), so doctors perform some harmless token medical procedure to make the patient feel he helped them.
At least MRI doesn't really screw the patient much, and doesn't screw society at all, unlike overprescription of antibiotics.
(I'm in favor of complete availability of most scheduled drugs -- narcotics, pot, LSD, whatever -- but restriction of antibiotics to those with a prescription. Drug resistant bacteria is no joke.)
There's probably some argument for 0.5T MR being diagnostic now, with faster computers. I just think Japan pushed to low-field earlier because they don't actually care about the results. Also Japanese tend to be physically smaller, so maybe a 0.5T there is as effective as a 1T in the land of the super-sized drive-through.
Antibiotics are restricted to those with a prescription in most European countries, for the reason you mentioned. That said, I still keep some in reserve (purchased via prescriptions from doctors in my family) to use judiciously when traveling or living abroad without wanting to deal with the local healthcare system.
The problem with studies like this is that they pick a single issue within healthcare and try to make a broad assessment from it. There have been other studies that break down the overall costs of health car in the US that are more informative. It's four years old, but this McKinsey study is a good example:
The Interactive Flash slide show is interesting as well (where "interactive" is defined as clicking forward and back buttons, I guess).
Without yet reading any of the other comments, I have an anecdote that may be interesting to others: One of my father's business partners has a mother that lives in France. She is ~88 years old, and the family's net-worth is on the order of 100s of millions ($USD). She had a medical condition which required surgery, but due to her age, she was not eligible in France, so she had to come to the US for her surgery. So, it seems like the phrase, "The US has the best healthcare money can buy" still stands.
> but due to her age, she was not eligible in France
I call bullshit on that. Due to general condition maybe, but if you are in great shape except on one risky point and the risk of treatment seems acceptable you are not going to be refused treatment because you are too old.
Just a plug for Paul Starr's The Social Transformation of American Medicine. It's the definitive text on healthcare in America. After that, all the other writing is quaint.
On a separate note, you should have seen the fear on the faces of the retired English couple I saw today when I sent the poor man to the ER. They're here on vacation, he had an MI 15 years ago, ran out of his aspirin a month ago on vacation, now he has had vertigo for a week (stumbling like a drink) and new onset high blood pressure. Never paid a dime for healthcare and I just sent them to the lion's den. I reimbursed them the cost of my office visit, but that will be a drop in the bucket.
It's a profit center whether you like it or not, with or without the government. With the government the profit goes into the bureaucracy.
The medicare + medicaid system has shown itself to be an extreme profit center for government employees and the bureaucracy. They take home massive sums in profit: wages and pensions.
The government doesn't make the system more efficient by reducing profit from the equation. They reduce cost by reducing care options, reducing salaries for healthcare workers, and rationing. For example, nurses in America make 50% more than nurses in Germany. Socialized medicine will decimate that pay variance.
There's nothing on earth more wasteful than government when it comes to spending money. Just ask the US government system (fed+state+local), it's a $7 trillion per year profit system, that flows directly into the hands of millions of employees that make on average $100k per year in wages + benefits, with that pay package doubling in size in just the last ten years, while the economy flat lined.
How do you explain the low costs and relative success internationally of the NHS (in the UK)?
I've no problem with a free market approach to healthcare when it works. But it seems hypocritical to criticise our approach for involving too much government intervention (something which supposedly reduces efficiency) as not being suitable for the US when it's more efficient than the current US system.
It is good to have highly paid nurses if it correlates with other good factors, else it is good for nurses but pointless for the general public, or even bad if it means the latter is being ripped off and the costs are absurdly high compared to other countries.
I just got my shoulder redone by arguably one of the best sports orthos in the country. This guy handles a substantial percentage of high profile professional athlete cases per year. He charged me $3200 for a rotator repair and bicep reattach. I think that's a bargain for his skill level.
My guess is the total bill will be another story though. I suspect my insurance will be dinged for about $11k. O.R. rental, nurse anesthetists who make $150/hr, etc are the source of expensive healthcare in the US, at least for surgery.
" If we had the per-person costs of any of those countries, America’s deficits would vanish. Workers would have much more money in their pockets. Our economy would grow more quickly, as our exports would be more competitive."
Also world peace would break out and poverty would be eliminated.
I liked the article, and I think this is most certainly a pressing problem for this country. But the facts are strong enough to independently make a strong case. No need for the hyperbole
This shows that big improvements in quality of life can be achieved with small changes. Give health care assistants better training about dementia and give them more time to talk to patients. This small cheap change has several benefits: nurses can do more nursing; meals get eaten; falls are reduced; people feel like they're getting better care; etc.
"The question, of course, is why Americans pay such high prices — and why we haven’t done anything about it."
This is probably the same reason we've taken close to 40 years to finally try and get off our dependence on foreign oil after Jimmy Carter said we needed to in 1978. Yet, we still pay more than we really should and haven't done anything about it.
Why? Lobbyists, too many layers of bureaucracy, special interest groups. Take your pick, but at the end of day, it takes a lot of people wanting to do the right thing to make things change. In this country, that's a lot harder to do than most people think.
Country US$ / US Gallon
Saudi Arabia $0.49
Puerto Rico $3.63
He did mean developed country. The US pays about two-thirds what Australians do for petrol, who in turn pay about two-third what Europeans do for petrol.
The panic that the US gets itself into when discussing fuel prices is amusing to watch. Australia is a big country with spread out cities like the US (or even more than the US) and similar wage levels, yet we don't have problems with post-paying cash for our fuel. In six weeks of driving around the US west a couple of years ago, I never found a single place where I could post-pay with cash - they were all too afraid of drive-offs. Weird.
Also, you've mangled the statistics - for example, you've used Vietnam's price per litre against the US's price per gallon.
Paying for the gasoline after you put it in the vehicle. At most gas stations in the US, if you want to pay with cash, you park your vehicle at a pump, go inside and prepay a certain amount, fill up your vehicle, and then go back inside to collect any money you didn't spend.
I always had the idea that American health care is more expensive because there's not much competition - there are just a few major companies that control the pharma industry and the hospitals, and it's pretty much impossible for someone to just barge in and start offering their services at a lower price - they'd have to pass by the government first (with their impossibly high fees and heavy regulations), then if successful, they'd be harrased to bankruptcy by the established monopoly.
It's much easier to open a private practice or hospital in the EU, for example...
Granted, the quality of medical care varies by a lot in India, but there are places and doctors in India who are so good, that if I am sick, all I want to do is take a flight back home...
The lack of health insurance in general in India ( now, it is being sold to a growing section of the population ) has meant that prices are comparitively lower ( though, they are really rising these days ).
Not necessarily, if the person running the machine or the person screening the results has to be a trained medical professional. In those cases, due to monopoly and other concerns, we'd have a supply bottleneck which would increase price given increased demands.
I don't however know if you have to be medically trained to use a MRI machine, or interpret the results
You don't need to be a doctor to run an MRI scan, but you do need to be one to interpret the results. In addition, you should really have at least one doctor around to decide exactly what you need to MRI in which way for optimal results for any given clinical problem, as the doctors who ordered the MRI done aren't usually specialists in that area.
In order to have access to an MRI scan you need to have a machine that's geographically close. If the nearest machine is 100 miles away the bar on what will justify a scan goes way up compared to if a machine is an elevator ride away. Buying more machines costs more money.
The capital costs for an MRI, while large, are not the biggest part of the price. I had an MRI done in Pune (with a good machine, 3T/32 channels) for 6500rs/$130.
Labor costs are a biggie. In the US, you need to pay technicians high US salaries, in the $60-70k neighborhood from what I hear. In Pune, the technician is almost certainly poorer than 95% of Americans. The high ratio of capital costs/labor costs also causes higher utilization of the MRI - in the US, many MRI places are 9-6, I had my MRI done in Pune at 9:30pm, and someone went in after I finished.
Labor costs are actually a much bigger deal than GDP figures would suggest. High skill individuals get a much bigger premium in the US than most of the rest of the world. A top 1% person in the US gets $384k/year, in Canada only $181k.
1) The trucks -- a lot of times MRI trucks are driven around to various hospitals, and scheduled in advance, for non-emergent studies. These obviously get scheduled during "working hours", and then the emergent off-hours MR studies are done by transporting the patient to a higher level facility and thus might get shot whenever.
2) The whole "doctor owned imaging center" scam or "perverse economic incentive", where doctors own imaging centers and then refer a lot of patients to them, increasing the use of the technology for basically no need. These are easy to schedule during working hours, too.
MRIs aren't much use for screening. They can't be used to diagnose many diseases at all, and for many others, their sensitivity and specificity are quite low. In addition, they produce a large number of huge, highly complex images that have to be reviewed by a human being, and it's incredibly easy to overlook something if you don't know what to look for. If I had a coffee for every time our radiology specialist has said some variant of "I wouldn't even have noticed that if I didn't know that's where the pain is -" well, let's just say, I'd find it a lot easier not to fall asleep in the radiology demonstration.
If you want one yearly screening procedure available to anyone, there are many better choices than MRIs, especially considering their high costs (even in non-US countries.)
On a related note, medical toursim is a great business/startup opportunity for other countries. Let them spend a weekend in a new city and get that dental filling done for far less cost. It's $4 in some medical colleges in India.
The watered-down implementation, though, may not stand up; as mentioned in the article, it will do little about prices besides force provider disclosure (itself an important step, as markets operate more efficiently when it's known what things cost, but not really enough).
Anyone who has insurance doesn't care about the price. They only care about the deductible. When people shop around, they look for the insurance companies that provide the lowest deductibles and stick with them. After that, there's no pressure on the providers to lower prices. The insurance companies in the US don't negotiate lower prices, they just pass on the cost to policy holders in their deductibles. The providers can increase the price without fearing that patients will go to a different clinic or buy a different generic version of their drug. Medical care in the US is one of the only industries where raising the price can get your more customers, since it makes the government push for universal health insurance to keep deductibles low.
There are a few solutions, two of which were mentioned in the article. The insurance companies can negotiate prices with providers, or the government can set the price. A third option is to let the patients themselves set the price by having them shop around. The patients would put pressures on the providers by going where they can get the cheapest MRI or the cheapest Lipitor. Then insurance would be reserved for emergency procedures, instead of being used as a medical credit card.
I don't know about you, but next time I need an emergency room or surgical procedure, I'm not going to be shopping for the cheapest one. The article addressed this - how do you 'shop around' when you're under anesthesia, and would you really hire the cheapest doctor to diagnose your daughters life threatening ailment? It just doesn't play out in reality.
I agree that much of the general public is insulated from price, however a few personal observations: (Note: I worked for 8 years for a state insurance company and my wife has been a nurse practitioner for 12 years)
People don't "shop" for healthcare the same way they shop for televisions or other consumer products. In fact the overwhelming majority tend not to all. Either someone like me at their insurance company picks a primary care physician for them, or they pick one from a list based on simple factors like someplace convenient, seems like it's a good part of town, etc. Unless the doctor is so unbelievably terrible, it's extremely unlikely they will switch. My wife, who is frustrated by many aspects of our healthcare system, attributes much of this to the complete and utter lack of medical literacy possessed by the general population. The average person simply has no idea how modern medicine works on any substantial level, so they have little to no basis for making an informed decision about their care or provider. When you are sick, even with something routine and non life-threatening, you don't think "Hmm I could go see the doctor today because I feel awful, but I think I'll price shop for a day or two beforehand." Even people with strong financial incentive, i.e., people with limited means, don't do this. If a child or loved one is involved you're even less likely to start thinking about dollars over medicine.
I do agree that most patients have no accurate understanding of the real cost of their care, and that more education in that department certainly can't hurt, but no matter how you slice it, that cost is simply much higher than it is in other developed societies, and that is a serious problem that needs to be addressed.
Edit: Something I wanted add: I know in a community like HN, many will be of the sentiment that if you fail to educate yourself about a product or service, you borderline deserve the consequences. I agree with this in most respects. However, taken to it's logical conclusion, that would require me to become an expert on everything under the sun. I have no idea how the plumbing in my home works, or how to do anything but routine maintenance on my car. It's not that I lack the interest to learn about these things, it's simply that there aren't enough hours in the day to plausibly accomplish this. When faced with the need of a professional expert, I have to use a little common sense mixed in with any superficial knowledge I do have, and trust that there is a system in place that prevents me from being totally screwed price wise.
> so they have little to no basis for making an informed decision about their care or provider
The problem with not allowing individual choice in regards to health decisions is illustrated succinctly by the War on Drugs.
Additionally, even if we rigorously proved that local decision actors in a market operate upon highly imperfect knowledge when making decisions, it would not constitute a proof that a global decision actor with access to enlightened knowledge would be able to make decisions for them more efficiently or justly by employing a non-market based algorithm.
> If a child or loved one is involved you're even less likely to start thinking about dollars over medicine
Why is medicine different from food, water, and shelter? Aren't those even more important survival needs we are forced to make tradeoffs regarding every day?
My Mom (no insurance) shops around as follows: "Hi, I'm told I need X done, but I need to know the price. I don't have insurance, and I want to make sure I have enough money to pay for it."
She tends to get accurate estimates, probably because hospitals don't like to hear "I thought it only cost $X, I don't have $X + $Y, so, umm..."
Granted, what she gets isn't likely to be a "a complete cost estimate [...], [...] reflective of any negotiated discounts, [...] inclusive of all associated costs, and did not identify consumers’ out-of-pocket costs", which is what the GAO wanted. But it's certainly good enough for shopping around.
Yes, most agree that security against unexpected and unpredictable costs, such as emergency room visits and catastrophic illness, is the proper role of insurance.
However, for drugs, chronic treatment, and preventative procedures, costs would much lower if consumers were allowed to shop around and haggle prices without going through insurance. This is why you see certain operations like Lasik, which are elective and not covered by anyone's insurance, becoming highly roboticized and deflating in cost rather than inflating.
I've heard this before. Do you think that Germans or the French end users care about the price? No - they're insured far better than any American without a (D) or (R) after their name. They just _go to the doctor when they're sick_. Period.
MRIs in Germany (or at least my part of it) tend to be relatively rare and booked almost completely full, because with the prices the way they are, they're not profitable unless they're utilized as much as physically possible. There's therefore usually a waiting period of a few days for a non-emergency MRI, which tends to make them a less attractive option for doctors and patients than they might be if they were instantly available. On top of that, they're still relatively pricy compared to other diagnostic procedures, and in Germany, a doctor or hospital who prescribes too many expensive procedures may get personally stuck with the cost, instead of being able to pass them on to the patient or insurer.
"The insurance companies in the US don't negotiate lower prices, they just pass on the cost to policy holders in their deductibles."
I'm sorry, this is wrong. The insurance companies actually DO negotiate lower prices. I recently had surgery and through my billing statements watched as first the hospital attempted to charge an obscene amount (that would have bankrupted me several times over had I not had insurance), then having my insurance company go through every line in the bill to let them know the max amt they will pay for each service provided. This was recently Reported on, I'll try and find the article.
You make a good point, in that the end users in the US just care about the deductible.
Part of this is that its hard (if not impossible) to find out what something will cost. The doctors don't (or rarely) know the cost, and it just isn't in the standard vocabulary of patients to inquire the cost and/or shop around.
85% of all healthcare costs in America are for those over the age of 65. America has the leading health care system for the elderly. We pay for 80 year olds to have surgeries that they can't get in Canada or France.
Nobody wants to talk about it though, because it's not a nice thing to say, that grandma is buying six extra months at a price of a million in treatment.
Socialized medicine will slice the most money out of treatment for people in that demographic. It's by far the largest savings spot. Good or bad, you can debate that endlessly; but that's exactly what will happen.
Although I disagree with your flippant tone, it's a fact that over 30% of medical costs come from care delivered in the last 6 months of life. Obviously you'd expect some top-heaviness here, but it makes one wonder about the cost of futile care (both in $$ and human suffering).
It wasn't meant to be flippant (or insensitive), just matter of fact.
My grandmother extended her life by about eight months by having breast cancer surgery at 87 or so. Was that ok? Personally I loved my grandmother. However, it was paid for by taxpayers. Her quality of life was terrible in those last eight months, but she did want to keep fighting to live. It's an extremely sensitive issue to debate on either side. The obvious bottom line is that we can't keep having our cake and eating it too.
There aren't any. The parent to this thread doesn't know what they're talking about. :)
It's just a way that the media/government gets people to accept their poor health care situation: it's better! and you couldn't get it anywhere else! The high costs? That's just the way things are, never mind these examples in every other developed country in the world.
The article you linked to doesn't show this. The pie graph at the end has a big green chunk which refers to, "Remaining health care spending". It doesn't say this only pertains to patient care. Also the chart is about spending higher than expected given our wealth.
I didn't find a place in the article that talked about administrative costs (i.e. salaries, bonuses, profits) that go to insurers.
I still doubt that it is the extra cost of caring for elderly people really well that is the major factor that is keeping the other costs high though. Especially since there are less very elderly people, as a percentage of population, than in other developed countries.
You want to hear David Sedaris on this. He was amazed that his visits to the dentist and to hospitals in France where so cheap they didn't even bother to charge him. He had to force them to bill him and it would be for tens not hundreds or thousands of dollars.
Social medicine works in Europe and in Cuba, where I've also seen it first hand. This is why it is so important to preserve the NHS here in the UK.