Healthcare costs

This article has two illuminating pieces of information, one that I knew and one I didn’t:

Americans spend more than twice as much per capita as other developed countries on health care — a crippling 18 percent of the country’s economic output, and growing.

America’s health care system is not much different from other developed countries in the volume of service. Our doctors prescribe more or less the same number of pills and X-rays, perform similar numbers of blood tests and surgeries, as doctors in the best European countries. While there are undoubtedly savings to be had by cutting unnecessary services (shortening hospital stays, for example), the main problem is that our system charges far more for each service — each office visit, each hip replacement, each day in a hospital bed, each dose of antibiotic. “The facile explanation is that doctors do too much,” said Peter Bach, a doctor at Memorial Sloan-Kettering who studies quality of cancer care. “But if you compare us to other countries on volume, we’re not leading in any category. The flip side is, we pay double for a lot of stuff.” (Actually, we lead in tonsillectomies and knee replacements, but his point is generally right.)

This means that the arguments on both sides are wrong to some extent–one side says that malpractice suits drive up costs because of the cost of the suits and the idea that it leads to lots of ‘defensive’ medicine; the other side claims that the pay for service nature of healthcare means unnecessary tests are run (both arguments might be true to some extent, but neither seems to be the main reason our costs are so much higher than other countries). The data seems to show that the problem isn’t the number of procedures but that each one costs much more in the US.

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