I understand that insurances covers part of the cost. However, the total cost (before coverage) is still much higher in America. Why?
Is the supply chain different? Are doctors and staff paid better in America?
In: 188
From a European perspective with some US experience of healthcare too.
Most answers here are too simplistic.
There are 3 main differences between the US and the way most Western nations are organised. Often you see a UK comparison which is not representative as a whole. The UK system is quite different from most EU countries. (Everything is government organised in the Uk, most places have a mix of regulation vs competition).
You always have to bear in mind that the government and the private entities work in unison and nof against each other in these systems.
So first out of 3;
1) Single payer negotiation. This doesn’t mean that there is only 1 drug negociated for a single condition. It means that the insurers and government operate together to negociate deals vs individuals negociating deals. In these systems, individual contractors don’,t go out on their own adventires to secure a deal, it’s always the collective (which includes the governments as a regulator) to secure deals) This private entities secures a price for a given medication. The government then dictates this collective price as a maximum for that medication. It does not prevent individuals from getting a better price against that maximum. So the goverment says, you cannot charge more than “x” amount of “y” amount of Insulin for a monthly dose. If you, as an individual, can secure a better rate than the insured price, you profit. That’s the competition part.
The 2nd part of the puzzle,
A government emphasis on first line support. This means that the general physician (GP) visits are subsidized. The barrier to go see a doctor are free at the point of contact. The idea is prevention vs treatment. You feel something is off? Go check with a doctor. The cost of these visits comes from general tax and is free for the patient. The idea here is that it’s cheaper to pay a visit to a GP for nothing serious than it is to see a GP when it’s already too late. They serve as a barrier to expensive hospital care. You don’t schedule appointments directly with the hospital bur always need to be referred by a GP. The consequence here is that potential serious conditions get discovered early, which means the treatmemt overall is cheaper. (But more “pointless” GP visits too).
The last part is standardized prices for prodedures and minimum rules for these procedures. For example. A hip replacement surgery with anastesia and a 3 day hospital stay can only be charged a maximum of 10k to insurers from hospitals (with 10k being the average price of this procedure amongst all hospitals nationwide)! The cheaper a hospital can arrange this price, the more profit they make. If you can do it for 7k, you can charge 10k and earn 3k profit. If you need to spend 9k (cause NYC so doctors earn more at your place) you only profit 1k.
The 4th part always includes some mandatory form of insurance for healthcare to citizens (like car insurance) and a minimal set of “governed” treatments to insurers. (Like you are obligated to provide cancer as part of the minimal insurance but weight loss surgery or dental insurance is outside of minimal coverage)
Together with yearly government reviews of these standards and everyone working together, you can essentially force the healthcare industry to enforce itself to maximise profits while still maintaining a minimum standard of care.
Any losses to the industry as a consequence of minimum coversage and standards is covered by taxes and any additional profits on top of that minimum is private and yours to keep.
*Apologies for spelling and grammar. I’m pretty wasted on my saturday nighf but i really wanted to chip in*
*Edit 2, remember that the most important difference between the US and other places is that these other places enforce boundaries in which the healthcare industry can profit is greater than the US boundaries. In the US, this boundary is set at ER visits. In most other countries, this boundary is set way before you need an ER visit with an emphasis on foreseebale diseases. So car crashes are covered in both systems but a missed Stage III cancer diagnosis is considered a failure of the GP/Hospifal system outside the US but a win for the system within the US*
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