So what are the reasons for the comparatively high cost of healthcare in the US?

[BILLSANDS]

The four main ones, in comparison to other OECD countries, seem to be:

• Higher costs of services [5]. This includes higher costs for laboratory tests, radiology, doctor’s fees, hospital beds, and private health insurance premiums
• A greater number of tests are ordered (such as MRI and CT scans) and more surgeries (e.g. CABG, hip and knee replacements) performed [5]
• Lack of controls in place to limit the rising costs of private insurance [5]
• Greater administrative costs [5]. In my opinion this is probably due to insurance complexity. Most clinics will not allow you to book an appointment until the office staff personally double check your coverage
• Healthcare in the US and Australia - a comparison

 

[dblack]

The four main ones, in comparison to other OECD countries, seem to be:

• Higher costs of services [5]. This includes higher costs for laboratory tests, radiology, doctor’s fees, hospital beds, and private health insurance premiums
• A greater number of tests are ordered (such as MRI and CT scans) and more surgeries (e.g. CABG, hip and knee replacements) performed [5]
• Lack of controls in place to limit the rising costs of private insurance [5]
• Greater administrative costs [5]. In my opinion this is probably due to insurance complexity. Most clinics will not allow you to book an appointment until the office staff personally double check your coverage
• Healthcare in the US and Australia - a comparison

Health care costs are inflated in the US because very few people are paying for their own health care.

 

[MedfordMan]

The four main ones, in comparison to other OECD countries, seem to be:

• Higher costs of services [5]. This includes higher costs for laboratory tests, radiology, doctor’s fees, hospital beds, and private health insurance premiums

It's always difficult to compare costs from country to country. Medical costs is India are lower than they are in the US, but what do medical professionals get paid to practice there and how much does it cost to live there.

The primary driver of the costs of medical services is cost shifting. When I as an insured person go into the hospital and receive a Tylenol, my insurance is charged $ 3.75 for a tablet I could purchase my self for $ .15. The problem is that the hospital gives out the same Tylenol to lots of folks who don't have insurance and pay a small amount of don't pay anything, so the cost of 24 folks who paid nothing is shifted onto my policy.

Of course the expectations of consumers (specifically American consumers) plays a role in the increased costs. What we consider basic conveniences (ie. private rooms, non generic drugs, cable TV) are all perks that many other countries don't offer without additional cost and is a way that they hold down costs.

Finally, defensive medicine adds a great deal to the cost of medical care in this country (see below)

• A greater number of tests are ordered (such as MRI and CT scans) and more surgeries (e.g. CABG, hip and knee replacements) performed [5]

This is where defensive medicine adds to the cost of medical care.

Defensive medicine is practiced to avoid medical malpractice. At the heart of medical malpractice is the "standard of care".

Civilly, a physician may be held legally liable for damaged caused by his medical malpratice if and when the care he or she provides falls short of the standard of care.

What is the standard of care? The Plaintiff bar will tell you the standard of care is what is generally accepted in the medical community, but ultimately the standard of care is whatever a jury says it is at the end of medical malpractice trial, because the Plaintiff Bar is constantly trying to challenge that standard to won damages for client whose situation falls outside of them.

So, imagine your the wealthy doctor and your be sued by some poor regular person who has had a terrible and tragic medical outcome.Their attorney argues that even though they didn't have the textbook symptoms of the disease which has caused their current problem, that disease could have been spotted, before it wreaked havoc on them, if had you only ordered an MRI. Your attorney could argue that the current scientific protocol suggests using an MRI only when the patient presents a certain set of symptoms or you have a reasonable scientific basis to believe the disease may be present (say 10%, so you're not doing a bunch of unnecessary testing). How comfortable would you feel that a jury is going to tell this poor plaintiff, I'm sorry that you were one of the 10% who got the disease even when they didn't have the traditional symptoms, especially when they can assuage their consciences with the doctor's insurance companies money?

Ironically, juries find against many of these plaintiffs, but one doesn't there is now legal precedent to argue that the standard of care has changed.

Whether it is because of adverse verdicts or the time and expense of being sued, many medical professionals have simply conceded and done more testing to protect themselves, thus changing the standard of care and taking the decision out of the hands of all those who disagree.

Does it make medical care more safe. Marginally so, as medical care is already very safe so this really only applies to those unusual, outlier cases. Does providing millions of tests, which show nothing, add to the cost of care. You bet it does.

• Lack of controls in place to limit the rising costs of private insurance [5]

That is probably the single most oft repeated fallacy about our current system.

In our current system, health insured is a highly regulated industry. In most states, before an insurer can make a premium increase (or a premium increase over a certain amount) the reasons for and the rationale behind that increase must be shown to the state Insurance commissioner and the state Insurance Commissioner must give the OK to the increase.

Now, I'm fervently opposed to for profit health insurance companies, but that's the subject of another argument. Still, an insurer who sets there rates so high that they make too much money can be forced to refund premiums or reduce premiums by a state Insurance Commissioner.

Every insurer has a combined ratio. Over simplifying things that ratio represents the combination of claim payments + the cost of doing business divided by the amount collected by premiums.

I've never worked in health insurance, but I have worked in property and casualty insurance and in that area, it's not unusual to see a P & C company with a combined ration of sat 101.7%. What does that mean? That means for every $ 100.00, they collected they paid out $ 101.70 in either claims payments of salaries and benefits. How does that company not go bankrupt? Well they collect the money and invest it, so that when they go to pay the money out that $ 100.00 is $ 104.00.

There is already a mechanism in place to control the cost of insurance, but the cost of insurance must increase (for companies to stay in business, if the cost of care increases).

The challenge is controlling medical costs, the increases in which drive increases in the cost of health insurance premiums.

• Greater administrative costs [5]. In my opinion this is probably due to insurance complexity. Most clinics will not allow you to book an appointment until the office staff personally double check your coverage

Most administrative costs are related to the taking down and keeping of medical records. Due to medical malpractice concerns, these costs won't decrease.

There may be some savings due to a lack of regulatory oversight (from the State and Federal Government), but I leave it up to you, if that lack of regulatory oversight is a good thing or a bad thing.

Health insurance billing could be less complex, but there would still have to be billing and/or accounting even in a 1st party payer system, so the gains system wide would be minimal. If you then replace the nice ladies at your local doctor's office with less efficient, unionized, federal employees, being paid a prevailing wage and Cadillac benefits, it's very possible the administrative costs are greater under a 1st party payer system.

• Healthcare in the US and Australia - a comparison

 

[Greenbeard]

Health care is primarily a service industry, the primary input is labor. As of this year, health care is the largest employment sector in the U.S. and the wages are comparatively pretty good--significantly higher than the OECD average. As long as we employ this many people in health care and pay them well, health care will cost more here than it does other places.

 

[Frankeneinstein]

The four main ones, in comparison to other OECD countries, seem to be:

• Higher costs of services [5]. This includes higher costs for laboratory tests, radiology, doctor’s fees, hospital beds, and private health insurance premiums
• A greater number of tests are ordered (such as MRI and CT scans) and more surgeries (e.g. CABG, hip and knee replacements) performed [5]
• Lack of controls in place to limit the rising costs of private insurance [5]
• Greater administrative costs [5]. In my opinion this is probably due to insurance complexity. Most clinics will not allow you to book an appointment until the office staff personally double check your coverage
• Healthcare in the US and Australia - a comparison

I have had 2 knee replacement surgeries, a hernia and appendix operations several pre knee replacement surgeries [8 surgeries in all] stitches in 11 different places [all sports related accept for appendix] at least a dozen hospital stays and total cost for me including taxes and insurance is $0.00...so in Australia [or anywhere else for that matter] how much money would they be giving me for all that.