Sunday, September 1, 2013

Why Does Basic Health Care Cost So Much In The U.S.?

Many of us have gone to a hospital for an emergency or just a routine check up, but are soon discouraged from returning because of the shocking price tag. I, myself, had an unsavory bill a couple of months ago from a visit to the ER. Because the hospital wasn't covered by my insurance, I had to find a way to pay around $9,000 for some IV meds, an Xray, and for a bored doctor to poke around my throat. With the Affordable Care Act coming into effect next year, there's a growing interest in finding out how much basic health care costs and why Americans are paying so much for so little. The answer is, well... complicated, so I'm only going to hit some low points.

First, I'd like to address the unfounded belief that the U.S. is paying more because of the obesity epidemic and our other unhealthy behaviors. America, in fact, has a lower prevalence of smokers and drinkers than most European countries, and even if that wasn't true, an increased prevalence of disease doesn't equal an increased price for the treatment.  Though we do have an obesity problem, our inflated bodies shouldn't account our inflated fees.

Source: Centers of Medicare and Medicaid Services
However, the bill, when we finally receive it, has been delegated and added to so much that the price we pay is fairly arbitrary. Costs for therapies and tests not only vary between states, but between facilities and patients. The difference isn't really even related to the quality of care either. Patients given an IV(a bag of sterile salt water thats production cost is kept secret but has been said to be less than a cup of coffee), a procedure with minimal physician interaction, can expect a wildly varying bill costing hundreds of dollars. 

Basically hospitals and clinics charge whatever they think that they can get away with. Sure, insurance companies try to haggle price down, but many times they don't have much bargaining power, because if the hospital is unmovable in its opinion the insurance company can just transfer the costs down to the patient by raising premiums. The patients have even less of a chance to lower their bill. There isn't a tidy menu with therapies and their prices on display so most doctors will choose to give their patients pricey, yet unnecessary, tests and drugs even if there are cheaper and equally effective alternatives available.

Now, in my opinion, how we fix these problems:


  • Government regulation: Most countries with lower health costs have some way of keeping tabs on drug and therapy pricing, but in the U.S. we like to consider the health industry a free market. This usually keeps prices down through competition, but, when patients are uninformed, hospitals, pharmaceutical companies, and other health facilities are free to raise their prices without their customers realizing that there are other options. 
  • A menu: I know it sounds ridiculous, but, once prices are set, if there were menus above each department displaying the prices for common procedures, I suspect that hospitals would have to make their bills honest. (In my mind this conversation would happen if menus were in hospitals. "Could I have this gunshot wound patched up?" "Would you like a drink with that?" "No, liquids go right through me." *Ba dum tish*
  • An addendum to "informed consent": If doctors were more forward with their patients and mentioned the alternatives to the expensive test they were about to order I think most patients would choose the cheaper option if it had similar effects. 
  • Education: As in everything, don't trust me or any other uncredited source. Get out there and read some articles! The New York Times, the Vlogbrothers, and many others have talked about this. My blog entry is just a stub, because I have so little time to dedicate to this to this huge topic. There is plenty of information out there if you look for it. 
  • I don't know... Immortality: If we were somehow impervious to harm or disease we wouldn't need health care, would we? 


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