Private enterprise bankrupting America?

[Hawker]

Here is an interesting article about health costs in the US compared to health costs worldwide: http://www.washingtonpost.com/business/high-health-care-costs-its-all-in-the-pricing/2012/02/28/gIQAtbhimR_story.html

Its long so here are some of the highlights:
1. The US pays much much more for everything.  A day in hospital is 4 times the cost in the US as opposed to Switzerland, which is the next most expensive.

In 2009, Americans spent $7,960 per person on health care. Our neighbors in Canada spent $4,808. The Germans spent $4,218. The French, $3,978.

2. If the US could get to Swiss levels, and Switzerland is ridiculously expensive as well, but if the US could get to Swiss cost levels, the federal deficit would be eliminated.

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.

3. The well run system have their government set prices for drugs.  The US does not.

In America, Medicare and Medicaid negotiate prices on behalf of their tens of millions of members and, not coincidentally, purchase care at a substantial markdown from the commercial average. But outside that, it’s a free-for-all. Providers largely charge what they can get away with, often offering different prices to different insurers, and an even higher price to the uninsured.

4. Individual Americans are victims of price gouging.  Passed out sick? Pay extra!!!

Health care is an unusual product in that it is difficult, and sometimes impossible, for the customer to say “no.” In certain cases, the customer is passed out, or otherwise incapable of making decisions about her care, and the decisions are made by providers whose mandate is, correctly, to save lives rather than money.

5. Obamacare is not going to fix this.  I find the following hard to believe but WaPo can hardly have made it up:

In the Medicare Prescription Drug Benefit, for instance, Congress expressly barred Medicare from negotiating the prices of drugs that it was paying for.

6. American health care professionals don't see any problem with this and insist government should not regulate prices.  Classic rentier mentality:

“There is so much inefficiency in our system, that there’s a lot of low-hanging fruit we can deal with before we get into regulating people’s prices.” says Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University.

7. This price gouging applies to the the full spectrum of procedures:
http://www.washingtonpost.com/wp-srv/special/business/high-cost-of-medical-procedures-in-the-us/?hpid=z2

For an illustration of this in practice, here is a woman who had similiar treatments in US and UK.  Look at the price difference...US charged $103,322 while UK charged $4750.
http://www.dailymail.co.uk/health/article-2105680/This-woman-emergency-op-Americas-hospital-stars-NHS-So-did-best-care.html

Anyone advocating a free market in health should take a long hard look at these figures.  Its clear that having the government negotiating prices with drug firms and trade unions is far more efficient than having every sick person competing through insurance companies with every other sick person.  

And its also clear that the US budget deficit is not due to some generic failure of government.  Its a failure due to the private market in health care.  Fix that and your federal deficit goes away overnight.

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[bb113]

I hate reading these stories... I just know at the end I will have two choices:

1) Resign myself to being slightly indoctrinated
2) Spend hours trying to figure out whats actually going on (what the numbers in the charts mean, what are the distributions of numbers that lead to the averages, etc)

5. Obamacare is not going to fix this.  I find the following hard to believe but WaPo can hardly have made it up:

In the Medicare Prescription Drug Benefit, for instance, Congress expressly barred Medicare from negotiating the prices of drugs that it was paying for.

I couldn't read the last page... is this really true? Does this include drugs used at the hospital?

[Rassah]

bitcoinbitcoin113, yes, that's true, though I thought "Obama care" got rid of that.

As for the OP, yes. So what? This is something probably everyone knows by now. The problem isn't that we have private health insurance, or socialized, but a horrible bastardization of both. Since neither side (socialize vs privatize) will relent in the debate, there's nothing that will ever be done about it.

[Hawker]

bitcoinbitcoin113, yes, that's true, though I thought "Obama care" got rid of that.

As for the OP, yes. So what? This is something probably everyone knows by now. The problem isn't that we have private health insurance, or socialized, but a horrible bastardization of both. Since neither side (socialize vs privatize) will relent in the debate, there's nothing that will ever be done about it.

Its worth reading the article.  It says what I have been saying for a while - having government negotiate prices for healthcare is more efficient.  Also, you have expressed concerns about whether the US is sustainable.  Fix the health issue and the US is no longer a chronic runner of deficits. 

[Rassah]

Not sure how that's possible, considering the entire federal health spending on medical is 846bil, and the budget deficit is 1,327bil

[ThomasV]

nice article.

the US healthcare = innocent people sacrificed to the Free Markets idol.

[Hawker]

You can't directly compare NHS care in the UK to private health care in the US. Apart from anything else, the NHS has long waiting lists for many kinds of treatment. Access to a waiting list isn't the same as access to treatment.

However, a 2005 study in the British Medical Journal compared the NHS against a Californian Health Maintenance Organization called Kaiser Permanente. Like the NHS, Kaiser provides "blanket" health coverage for its members.

From the article's conclusion:

Kaiser achieved better performance at roughly the same cost as the NHS because of integration throughout the system, efficient management of hospital use, the benefits of competition, and greater investment in information technology.

The difference in efficiency isn't much, but it should put to rest the idea that a comparable level of healthcare is more expensive in the US.

Here's the reference. The article is well-written and quite readable:
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC64512/?tool=pmcentrez

KP is a fine organisation.  But its not a health system - its just a small part.  According to wikipedia, the NHS copied KP in the some of the parts that are comparable.  However, the NHS takes all comers - KP cherry picks patients.

However, can I suggest you read the WaPo article?  It doesn't compare the US to the NHS.  The issue is not quality of care - its the over-charging for it.

[Rassah]

nice article.

the US healthcare = innocent people sacrificed to the Free Markets idol.

Africa  = innocent people sacraficed to lack of food.
 

[Kettenmonster]

1. The US pays much much more for everything. ...

The regular price for Aspirin 40pc at I think 320mg each is 15€ around here, current EUR/USD is 1.3something.
So no not just 2 but 20 bucks for that.

p.s.
Could be this is the only example working this way.

[bb113]

http://www.washingtonpost.com/wp-srv/special/business/high-cost-of-medical-procedures-in-the-us/?hpid=z2

There is no way these numbers mean what you are supposed to think they mean. $35 for an angiogram in canada? That is the total cost of the procedure? No way.

[Hawker]

http://www.washingtonpost.com/wp-srv/special/business/high-cost-of-medical-procedures-in-the-us/?hpid=z2

There is no way these numbers mean what you are supposed to think they mean. $35 for an angiogram in canada? That is the total cost of the procedure? No way.

Good find.  The American one is ridulously low too.  My guess is that its the materials; not the full procedure.

The overall point is correct though.  Americans are being overcharged and its the lack of a national price negotiation that causes it.  

[SgtSpike]

Three reasons US healthcare is expensive:

1.  People are allowed to sue doctors, hospitals, and drug companies for hundreds of millions of dollars.  I mean, come on, does hundreds of millions really compensate a person better than a few million would?  Either way, they're set for life.

2.  Because the US takes a free and capitalist approach to the medical world, companies pour tens of billions of dollars into R&D for innovative new treatments and techniques.  So, the US has the latest and greatest treatments, but it costs a lot to recover those R&D expenditures.

3.  Because people are allowed to be treated without paying for it.  Illegals included.  Hospitals have to recover costs from people who don't pay somehow...

So, if you really want to fix US healthcare costs, stop allowing people to get $200M judgments when someone is maimed for life, learn to deal with a decrease in innovation of new medical technologies and treatments, and stop treating people who can't pay for it.

[Rassah]

You missed the most important reason, which is that Americans don't know the actual cost of healthcare because they are "shielded" from it by our insurance policies. Specifically, most of insurance is paid by employers, so, if the total cost of covering you is $400 a month, your employer takes $325 of that out of your paycheck without you even knowing about it, and charges you only the remaining $75 a month. I guarantee you that if the law allowing employers to provide group coverage and get a big tax break on it was repealed, and people were forced to pay that entire $400 out of pocket, people would be forced to be choosy in their insurance plans, and demand the costs get reduced.

Out of curiosity, who here, who lives in USA, even knew that your employer pays about 75% of your medical insurance, takes that money out of your income, and doesn't even tell or report it to you? I only found out because my employer started offering insurance for same sex couples, and had to disclose that since the Federal Government doesn't consider same sex couples as married, the entire portion paid by the company for the spouse would have to be reported as extra income and taxed as such. (I.e. if I was married, I would pay an extra $60 a month for my spouse, and that's it, but since I'm not legally married, I pay the $60, the state discloses that they paid the other $340, that $340 gets treated as extra income I earned, a come tax time I have to pay an extra $80 out of pocket for every month I had insurance on my spouse).

[Hawker]

Three reasons US healthcare is expensive:

1.  People are allowed to sue doctors, hospitals, and drug companies for hundreds of millions of dollars.  I mean, come on, does hundreds of millions really compensate a person better than a few million would?  Either way, they're set for life.

2.  Because the US takes a free and capitalist approach to the medical world, companies pour tens of billions of dollars into R&D for innovative new treatments and techniques.  So, the US has the latest and greatest treatments, but it costs a lot to recover those R&D expenditures.

3.  Because people are allowed to be treated without paying for it.  Illegals included.  Hospitals have to recover costs from people who don't pay somehow...

So, if you really want to fix US healthcare costs, stop allowing people to get $200M judgments when someone is maimed for life, learn to deal with a decrease in innovation of new medical technologies and treatments, and stop treating people who can't pay for it.

Please read the article.  None of those is a significant factor.

[bb113]

http://www.washingtonpost.com/wp-srv/special/business/high-cost-of-medical-procedures-in-the-us/?hpid=z2

There is no way these numbers mean what you are supposed to think they mean. $35 for an angiogram in canada? That is the total cost of the procedure? No way.

Good find.  The American one is ridulously low too.  My guess is that its the materials; not the full procedure.

The overall point is correct though.  Americans are being overcharged and its the lack of a national price negotiation that causes it.  

I dunno, I work at a VA hospital (biomed research, not healthcare) but my lab is also part of a nearby private hospital so sometimes we have a choice of who to order through. It is common for supplies to be cheaper when ordered through the private hospital (although this is not always true and sometimes works in reverse). Some things are twice as expensive. This is due to the way the government grants contracts and approves vendors. There is usually a way to get your preferred vendor approved but depending on the scenario this could take months. No one has time to sit around and wait (you never really know how long the wait will be or the final price) so we just spend more, this is going on all over the country and just gets included in the cost of doing business and thus NIH grants, etc. The net effect is rising prices and siphoning money from the granting agencies (often taxpayers) to the overpriced suppliers.

I'm not saying this is the way it has to play out, just that single-, thirdparty-payer systems can be and are gamed. Large vendors will usually have entire departments devoted to dealing with the government.

[ineededausername]

I hate reading these stories... I just know at the end I will have two choices:

1) Resign myself to being slightly indoctrinated
2) Spend hours trying to figure out whats actually going on (what the numbers in the charts mean, what are the distributions of numbers that lead to the averages, etc)

So you refuse to accept facts that do not conform to your political views?  The facts have to be false, and if they don't appear to be false, you are being "indoctrinated?"

Well, it might be a bit extreme to say that you don't accept them.  Perhaps you reluctantly concede.

This is the reason why debates change nobody's minds.  Because you already assume the opponent is wrong and because you give your own position a "second chance," you can always find a rational retort after a while. 

[Hawker]

I hate reading these stories... I just know at the end I will have two choices:

1) Resign myself to being slightly indoctrinated
2) Spend hours trying to figure out whats actually going on (what the numbers in the charts mean, what are the distributions of numbers that lead to the averages, etc)

So you refuse to accept facts that do not conform to your political views?  The facts have to be false, and if they don't appear to be false, you are being "indoctrinated?"

Well, it might be a bit extreme to say that you don't accept them.  Perhaps you reluctantly concede.

This is the reason why debates change nobody's minds.  Because you already assume the opponent is wrong and because you give your own position a "second chance," you can always find a rational retort after a while. 

There, in a nutshell, you have summarised the problem with idealists.

[bb113]

I hate reading these stories... I just know at the end I will have two choices:

1) Resign myself to being slightly indoctrinated
2) Spend hours trying to figure out whats actually going on (what the numbers in the charts mean, what are the distributions of numbers that lead to the averages, etc)

So you refuse to accept facts that do not conform to your political views?  The facts have to be false, and if they don't appear to be false, you are being "indoctrinated?"

Well, it might be a bit extreme to say that you don't accept them.  Perhaps you reluctantly concede.

This is the reason why debates change nobody's minds.  Because you already assume the opponent is wrong and because you give your own position a "second chance," you can always find a rational retort after a while.  

There, in a nutshell, you have summarised the problem with idealists.

No, the very nature of any "media" is to indoctrinate. I thought I wouldn't have to explain that here. My bad.

edit: I'm not saying that is "bad", it is just how it has to be because most people don't care about details. If you want real information you need to find it for yourself. The prices for various medical procedures are an example of this. I get that they were trying to illustrate their point with those numbers, and their point may be correct. The numbers they present do not actually support it though.

[Hawker]

I hate reading these stories... I just know at the end I will have two choices:

1) Resign myself to being slightly indoctrinated
2) Spend hours trying to figure out whats actually going on (what the numbers in the charts mean, what are the distributions of numbers that lead to the averages, etc)

So you refuse to accept facts that do not conform to your political views?  The facts have to be false, and if they don't appear to be false, you are being "indoctrinated?"

Well, it might be a bit extreme to say that you don't accept them.  Perhaps you reluctantly concede.

This is the reason why debates change nobody's minds.  Because you already assume the opponent is wrong and because you give your own position a "second chance," you can always find a rational retort after a while.  

There, in a nutshell, you have summarised the problem with idealists.

No, the very nature of any "media" is to indoctrinate. I thought I wouldn't have to explain that here. My bad.

edit: I'm not saying that is "bad", it is just how it has to be because most people don't care about details. If you want real information you need to find it for yourself. The prices for various medical procedures are an example of this. I get that they were trying to illustrate their point with those numbers, and their point may be correct. The numbers they present do not actually support it though.

If they have published numbers that don't support their point, show them.  Its the willingness to accept what they mean that is a problem.

[bb113]

If they have published numbers that don't support their point, show them.  Its the willingness to accept what they mean that is a problem.

I hate reading these stories... I just know at the end I will have two choices:

1) Resign myself to being slightly indoctrinated
2) Spend hours trying to figure out whats actually going on (what the numbers in the charts mean, what are the distributions of numbers that lead to the averages, etc)

In good time. This is worthwhile to be informed about.