One Simple Reason Why Health Care Costs More In The US Than Anywhere Else

[hvactec]

Americans are feeling the pinch of rising health care costs more than any other nation in the world.

A huge reason why is simply that America lets providers set prices.

The Washington Post's Ezra Klein draws this conclusion from talking to Johns Hopkins' Gerard Anderson:

“Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,” Anderson says. They do this in one of two ways. In countries such as Canada and Britain, prices are set by the government. In others, such as Germany and Japan, they’re set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail.

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."

As we've reported, the average U.S. family of four dropped more than $8,000 on basic health care services in 2011, while record numbers of Americans have been filing for bankruptcy due to outstanding medical bills they can't afford to pay.

Check out Klein's chart below to see how America's medical costs stack up against other countries like France and India:

Read more: One Simple Reason Why Health Care Costs More In The US Than Anywhere Else - Business Insider

 

[kiwiman127]

The cost of health care in the US is hurting the US economy and the US competitiveness on the world stage.

[B]Healthcare Costs and U.S. Competitiveness[/B]

The United States spends an estimated $2 trillion annually on healthcare expenses, more than any other industrialized country. According to data from the Organization for Economic Cooperation and Development (OECD), the United States spends two-and-a-half times more than the OECD average, and yet ranks with Turkey and Mexico as the only OECD countries without universal health coverage. Some analysts say an increasing number of U.S. businesses are less competitive globally because of ballooning health care costs. U.S. economic woes have heightened the burden of health care costs both on individuals and businesses. The U.S. health care reform law signed by President Barack Obama on March 23, 2010, includes measures aimed at making healthcare less expensive and more accessible, including upgrades to government-run Medicare and Medicaid. Still, reforming health care has proved politically divisive, especially over the option to expand social medicine, as well as new mandates on employers and individuals. Whether these reforms will reduce the health care-cost burden on U.S. industry remains under debate.
Healthcare Costs and U.S. Competitiveness - Council on Foreign Relations

We're not only talking about individuals, we're talking businesses and our government (at taxpayer expense).
So what do we want? Do we want the Free Market to correct this, all the Free Market has done is to price health care so high that it's a threat to the economic security of the US. Just about every economist has stated the threat of the outrageous health care costs is hurting the US economy.

Maybe it's the time to do what most of the rest of the world's countries do, negotiate health care prices.

 

[M14 Shooter]

Americans are feeling the pinch of rising health care costs more than any other nation in the world.
A huge reason why is simply that America lets providers set prices.

Normally, where there is supply and demand, the market sets prices.
However, fior this to work properly, the prospective consumer must be directly encumbered with paying the cost of the goods and services he consumes.

When third-parties pay for those goods/services, the consumer is insulated from the costs of what he receives, and the free-market system of supply/demand breaks down.

Simple solution: remove third-party payers and expose the consumer to the full cost of the goods and services he receives. This will cause consumers to 'shop around' and thus force providers to compete for business; this, in turn will lower prices and improve quality.

Want to solve the 'problem' of health care costs? Make people pay for it themselves and bring the free market back ito it.

 

[GHook93]

Obaminationcare doesn't do any of that!

Americans are feeling the pinch of rising health care costs more than any other nation in the world.

A huge reason why is simply that America lets providers set prices.

The Washington Post's Ezra Klein draws this conclusion from talking to Johns Hopkins' Gerard Anderson:

“Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,” Anderson says. They do this in one of two ways. In countries such as Canada and Britain, prices are set by the government. In others, such as Germany and Japan, they’re set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail.

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."

As we've reported, the average U.S. family of four dropped more than $8,000 on basic health care services in 2011, while record numbers of Americans have been filing for bankruptcy due to outstanding medical bills they can't afford to pay.

Check out Klein's chart below to see how America's medical costs stack up against other countries like France and India:

Read more: One Simple Reason Why Health Care Costs More In The US Than Anywhere Else - Business Insider

 

[GHook93]

Why do you think aspirin costs $5 a pill in the hospital?

Americans are feeling the pinch of rising health care costs more than any other nation in the world.

A huge reason why is simply that America lets providers set prices.

The Washington Post's Ezra Klein draws this conclusion from talking to Johns Hopkins' Gerard Anderson:

“Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,” Anderson says. They do this in one of two ways. In countries such as Canada and Britain, prices are set by the government. In others, such as Germany and Japan, they’re set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail.

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."

As we've reported, the average U.S. family of four dropped more than $8,000 on basic health care services in 2011, while record numbers of Americans have been filing for bankruptcy due to outstanding medical bills they can't afford to pay.

Check out Klein's chart below to see how America's medical costs stack up against other countries like France and India:

Read more: One Simple Reason Why Health Care Costs More In The US Than Anywhere Else - Business Insider

 

[PredFan]

You want the best, you pay for it.

 

[M14 Shooter]

Why do you think aspirin costs $5 a pill in the hospital?

Because the patient isn't paying for it directly.

 

[Douger]

Open the yellow pages to physicians. Read the names.
Next open to attorneys. Read the names.
You now have your answer.

 

[kiwiman127]

So I see those actually defending the outrageous cost of health care in the US don't care about America's business competitiveness. And people don't care if the super cost of health care in the US is cutting into their expendable income. Neither do they understand that the increased cost of health care insurance their employer provides effects their wage growth. Who pays for the high costs that increases 3-4 times the inflation rate,,,every poster on these boards.
When you folks buy a car and the salesman offers you a deal, do you say, no,,I want to the pay sticker price?

 

[rdean]

The single largest reason can be summed up with one word, "Republicans".

 

[Procrustes Stretched]

Americans are feeling the pinch of rising health care costs more than any other nation in the world.

A huge reason why is simply that America lets providers set prices.

The Washington Post's Ezra Klein draws this conclusion from talking to Johns Hopkins' Gerard Anderson:

“Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,” Anderson says. They do this in one of two ways. In countries such as Canada and Britain, prices are set by the government. In others, such as Germany and Japan, they’re set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail.

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."

As we've reported, the average U.S. family of four dropped more than $8,000 on basic health care services in 2011, while record numbers of Americans have been filing for bankruptcy due to outstanding medical bills they can't afford to pay.

Check out Klein's chart below to see how America's medical costs stack up against other countries like France and India:

Read more: One Simple Reason Why Health Care Costs More In The US Than Anywhere Else - Business Insider

Interviews - Pascal Couchepin | Sick Around The World | FRONTLINE | PBS

NHPublicTV: U.S. Health Care: The Good News | The Good News in American Medicine

 

[M14 Shooter]

The single largest reason can be summed up with one word, "Republicans".

Ah... the resident partisan bigot surfaces to further illustrate his uselessness.

 

[Procrustes Stretched]

You want the best, you pay for it.

man oh man, some of you people are truly disturbed, yet funny

 

[Political Junky]

The US ranks #37 and has the highest health care costs in the world.

 

[Greenbeard]

Americans are feeling the pinch of rising health care costs more than any other nation in the world.

A huge reason why is simply that America lets providers set prices.

Another plug for thinking about all-payer rates (from this thread: "http://www.usmessageboard.com/healt...-on-equalizing-payments-for-medical-care.html"):

Other nations with multiple insurance carriers – for example, Germany and Switzerland – avoid price discrimination in health care through negotiations over prices between regional associations of health insurers and counterpart associations of health care providers, subject to some overall budget constraint informed by macroeconomic conditions (e.g., growth of the payroll on which premiums are based or per capita income). The negotiated prices then apply uniformly to all insurers and all providers in a region (states in Germany and cantons in Switzerland). In the United States, Maryland has operated such an “all payer” system for hospitals for several decades.

An all payer system has the potential to reduce health care costs in several ways, including the discipline of a fee schedule on providers, the schedule to be negotiated with providers on a regional basis, and a reduction in the enormous complexity and high administrative costs of the current system.

If it is desired, an all payer system can also serve as a way to constrain the future growth of health care to some desired path – e.g., with total national health spending growing annually only 0.5 percentage points faster than the growth of the rest of gross the domestic product, rather than the traditional two percentage points faster that prevailed over the last four decades. A two percentage point differential is simply not sustainable.

In my above-cited paper, I advocate an all payer system for the United States to eliminate the pervasive price discrimination inherent in American health care and, to the extent it exists, the much-lamented cost shift. For readers of this blog, Health Affairs has graciously provided access to the paper until Nov. 16. I invite readers to take a look at my argument for an all-payer approach and share with us their reaction to it.

Some other threads on this problem:

• http://www.usmessageboard.com/healt...lth-care-community-that-we-had-to-change.html
• http://www.usmessageboard.com/healt...57-payer-and-provider-do-battle-in-texas.html

And on all-payer rate-setting in general:

• http://www.usmessageboard.com/healt...ok-at-all-payer-rate-setting-in-maryland.html
• http://www.usmessageboard.com/healt...161734-hospital-rate-setting-in-maryland.html
• http://www.usmessageboard.com/healt...6061-an-alternative-to-the-public-option.html

 

[uscitizen]

Medicines that go of of patent and become generics often cost 1/1000 the brand name drug.

and don't give me that development crap. the US govt pays for much of the drug development and research thru universities and the NIH.
Drug companies spend more on advertising than they do development.
And many of our patent drugs are manufactured overseas and are sold MUCH cheaper in other countries.

A majority of our patent drug ingredients are imported from China for the drugs made here as well.

 

[dblack]

Why do you think aspirin costs $5 a pill in the hospital?

Because the patient isn't paying for it directly.

Yup... pretty much the core of the problem.

 

[auditor0007]

Americans are feeling the pinch of rising health care costs more than any other nation in the world.
A huge reason why is simply that America lets providers set prices.

Normally, where there is supply and demand, the market sets prices.
However, fior this to work properly, the prospective consumer must be directly encumbered with paying the cost of the goods and services he consumes.

When third-parties pay for those goods/services, the consumer is insulated from the costs of what he receives, and the free-market system of supply/demand breaks down.

Simple solution: remove third-party payers and expose the consumer to the full cost of the goods and services he receives. This will cause consumers to 'shop around' and thus force providers to compete for business; this, in turn will lower prices and improve quality.

Want to solve the 'problem' of health care costs? Make people pay for it themselves and bring the free market back ito it.

That's a great idea if everyone could afford the $80,000 bill for heart surgery. The problem is that people need insurance because very few are prepared for a bill that big. Now what might help is if health insurance was limited to major medical and all the everyday stuff was left to the consumer to pay out of pocket.

 

[auditor0007]

You want the best, you pay for it.

Most Americans would be happy with a reliable Ford. Instead we are all paying for a Bentley that breaks down all the time.

 

[uscitizen]

Why do you think aspirin costs $5 a pill in the hospital?

Because the patient isn't paying for it directly.

Yup... pretty much the core of the problem.

A patient paying out of pocket for health care pays more than the insurance company does for exactly the same service/procedure.