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.
There was a good look at how it is done in 5 capitalist democracies here: http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/c...
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.
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.
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.
Many tests, drugs and treatments have been applied in the name of defensive medicine.
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?
Citations re: excess testing:
Although our estimates delineate a wide range of potential savings, systemwide savings from aggressive malpractice reform could approach $41 billion over five years.
According to one source  the U.S. spent $2.6 trillion in health care in 2010. An $8 - $9 billion dollar savings per year from eliminating defensive medicine hardly adds up to "a lot more than 2%".
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.
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
 - http://www.amazon.com/The-Lawyer-Myth-American-Profession/dp...
I don't think there is any assumption at all that our health care system works as it stands today.
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.
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.
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.
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.
If true, you are glossing over a pretty substantial difference between the two systems.
I.e., Nitramp is wrong, people are capable of shopping around, all they need is incentive to do so.
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 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).
Parent was looking for an example to explain a possible situation, not a dynamic that the entire world must obey at all times.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
"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."
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.
By few, you mean two, soon to be one. The US and New Zealand, and New Zealand has passed legislation to phase it out.
The US will be the only country in the world where you can be advised of your potential need for a prescription drug not by a medical professional, but by an actor on a television screen.
Disclaimer: I live in America.
Exactly. The level of care is not addressed, therefore you can call the US a backwater and hence receive upvotes.
Now, I'm no economist, but that argument does seem to make absolutely no sense whatsoever.
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.
I just want one of them. Is that ok?
[ I want to scan beez :) ]
This nationwide chain provides MRIs as low as $335 depending on the state.
No insurance accepted, no payment plans. Those cost money. Just charges the cost.
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.
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.
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.
 Vanguard documentary "Oxycontin Express": http://www.youtube.com/watch?v=J7DHMqHFSB8#t=1250s
If they'd really get out of the way, MRIs could perhaps cost $200 in the USA due to the volume that could be absorbed by clinics.
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. :~(
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.
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?
Also, last time I checked the numbers on this was towards the end of Bush's presidency, so this is not a recent development.
How can there be competition when no-one can give you the price of the procedure? Seriously WTF.
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?)
I wish there were a law that Hospitals have to be able to quote the price of any procedure within a few hours after the patient asks for it.
"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?
Of course the MRI machine was itself invented in the US:
Of course the MRI machine was itself invented in the US
I have no way of judging the value of their respective contributions to the field, but I do know that the Nobel prize for magnetic resonance imaging didn't even go to Damadian, but was instead shared by a different American and a Brit. http://en.wikipedia.org/wiki/List_of_Nobel_laureates_in_Phys... (2003)
The development of the MRI machine falls a little outside this 30 year window, but at almost exactly the same time that IVF was being developed in the UK. http://en.wikipedia.org/wiki/Louise_Brown
For more recent innovation, how about cloning? http://en.wikipedia.org/wiki/Dolly_%28sheep%29
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.
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.
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.
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.
If you believe the article, you'd have to consider most of the extra cost an ideology tax "subsidising" profits in the health care industry.
Americans have decided that subsidising home ownership is worth more than subsidising health care. Other countries do it the other way around.
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.
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.
* 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?
>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.
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.)
Specifically, consider Bayer. This is listed as a German pharmaceutical company. Bayer reports to have 37,000 employees, however 16,000 of thema are in the USA. (http://www.bayerpharma.com/en/company/index.php, http://www.bayer.com/en/north-america.aspx).
Better statistics are provided elsewhere in wiki, for instance US R&D expenditure dwarfs that of any other country. It is also about 33% higher than that of the combined total of EU countries.
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.
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).
Look at the US's trade deficit and dollar devaluations of the past 50 years to see who is subsidizing who. But that's beside the point.
Look at it less nationalistic and rather as corporations vs. consumers. American consumers are "subsidizing" large corporations in an oligopolic market.
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.
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.
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).
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.
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.
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.
A needs-based study based on having MS, sure, but just getting an MRI as part of a routine checkup, probably not.
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.
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?
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.
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.
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.
(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.
That was what I paid out of pocket, which is 1/3 of what the clinic actually charges. Insurance paid the remaining 2/3 of the cost.
The Interactive Flash slide show is interesting as well (where "interactive" is defined as clicking forward and back buttons, I guess).
[I will now read the other 80 comments...]
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.
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.
France: 21.8 MRI scans per year per 1,000 population
I don't however know if you have to be medically trained to use a MRI machine, or interpret the results
Low bandwidth costs mean that it can be done halfway around the world.
As long as healthcare is a profit center, you will only have the right to die quietly if you cannot afford it in America.
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.
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.
The government is a shield against abusive private industry, they just happen to be bad at it and expensive.
Giving the government less money won't make it more efficient, just worse at it's job.
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 $150/hr, etc are the source of expensive healthcare in the US, at least for surgery.
Also world peace would break out and poverty would be eliminated.
I liked the article, and I think this is most certainly a pressing problem for this country. But the facts are strong enough to independently make a strong case. No need for the hyperbole
Here's one fascinating article about US prisons which face a serious problem. (Caution: contains descriptions of violent crimes.)
This shows that big improvements in quality of life can be achieved with small changes. Give health care assistants better training about dementia and give them more time to talk to patients. This small cheap change has several benefits: nurses can do more nursing; meals get eaten; falls are reduced; people feel like they're getting better care; etc.
This is probably the same reason we've taken close to 40 years to finally try and get off our dependence on foreign oil after Jimmy Carter said we needed to in 1978. Yet, we still pay more than we really should and haven't done anything about it.
Why? Lobbyists, too many layers of bureaucracy, special interest groups. Take your pick, but at the end of day, it takes a lot of people wanting to do the right thing to make things change. In this country, that's a lot harder to do than most people think.
Country US$ / US Gallon
Saudi Arabia $0.49
Puerto Rico $3.63
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.
Many municipalities in the US have made post-pay illegal, so even if gas stations wanted to offer it they couldn't.
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 ).
about 20% of physicians are in the top one percent. This is the highest percentage of all occupations.
I wish each person could get access to an MRI each year it would be nice to track your health visually.
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.
A nit, but is this actually true? I've had 7 MRI's (5 health-related, 2 research-related) and only one of them was during business hours. I've had MRIs done at 9pm, 11pm, 1am, 4:30am, 6am etc.
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.
I imagine it would also be different for a hospital MRI (which needs to be available for emergencies) and outpatient MRI centers (which is where I've always gone).
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.)
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.
We have strong experimental evidence that when people are not insulated from price, they shop around and consume less medicine with no measurable effect on their health.
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.
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?
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.
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.
Moreover, in a system like the US health care the "average" isn't very meaningful, because if you and I have a sore knee, and you get 2 MRIs per year, and I get none, well...
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.
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.
It seems highly unlikely that it would change so drastically in just 8 years. Where does your 85% figure come from?
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.
Those are costly procedures, taking place in public hospitals without any extra. Yay for socialized medecine !
Which brings me to my question : what kind of surgeries can't you get at 80+ years old in France ?
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.
All of this is bullshit.
A full 1/3 of the cost of healthcare in America goes into maintaining our system and not into actual patient care.
I didn't find a place in the article that talked about administrative costs (i.e. salaries, bonuses, profits) that go to insurers.
 And hang on a second. You say if any? Really? You think there is no competition for resources?
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.
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.