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
The US health system is entirely for profit & run by human beings. They couldn’t give a rat fuq about actual people & suffering. I have friends who’ve been denied new leg prosthetics & they have to beg via ‘appeals’.
Both higher labor costs and higher equipment / medicine costs. Labor costs are hard to avoid as there’s zero political will to pay doctors and nurses less. Equipment and medicine costs are higher as the population has higher income and we’ve been generous to encourage those industries to be in the US.
We also have inefficiencies.. use the ER for whatever ills you.
Price is always based on supply and demand.
I’m surprised no one ( that i read) has mentioned the absurdly low amount of medical school students that the American medical association allows, causing a great shortage in the supply of doctors. Couple this with the heavier than norm regulations on what non doctor medical professionals can do. I have a friend who has been a pharmacist in both the uk and in the usa, in the uk pharmacists can do msny things that in the usa u must see a doctor for. Also, the education requirements to be a doctor in usa are greater than all eu countries. There has been a concerted effort by lobbyists and professional organizations to restrict supply in order to drive up price.
Because any attempt to fix it will mean that rich people don’t get to be as rich as they are, and they are willing to spend some of their money to ensure that they get to keep more of their money.
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*
US Healthcare makes $4.3trillion a year. About 30% goes to Health Insurance. More than goes to doctors (~9-10%) and about the same that goes to hospitals.
That’s about $1.3 T in money that contributes nothing to care. But that money also powers multiple SP500 companies (United & CVS are top 10 companies in revenue in the US). , provides hundreds thousands jobs & contributes millions to Congress. And it runs about 50% of Medicare, which is biggest expense in US budget. So Congress won’t dare hurt it w/ universal healthcare coverage or cutting health insurance bottom lines.
The USA doesn’t have a Healthcare System. It has a Healthcare market.
Markets rely on supply and demand. The demand for healthcare in the states is massive due to not enacting good policies to protect its citizens, therefore the cost skyrockets. Greed also plays a huge part in it too.
Canada nationalized health care in the 70’s. There is no middle men. Government run hospitals, government administered ‘insurance’ that is just money taken from taxes. There is no ‘health care insurance coding industry’. We also banned prescription drug advertising as ads are the #1 line item (not r&d). There is no brand name hospitals. It is just ‘the hospital’.
There are private medical clinics in most strip malls but those are run under strict cost controls with no cost to the end user.
The end result is Canada spends around $5900 USD per year to cover 100% of the population. America spends $12,300 USD per person to cover 91% of the population and has a life expectancy 4-5 years less than Canada.
https://en.m.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita
It is cheaper to have a streamlined system than to let corporations run wild. America is also the only 1st world country in the world not to negotiate drug prices. So a bottle of insulin in Canada is $25-$30 CAD vs $300 USD. Same stuff. You can’t blame r&d as Canada invented insulin and gave the patent away as ‘it was too important to patent’.
The drugs hospitals give out are billed to the system without profit. So an Aspirin is $1.65 instead of $165.00. No middle men and corporations to profit from that pill.
Another factor to high prices is by law, Hospitals have a duty of care. If you walk in, or more likely are brought in by someone and you are dying, the staff have a duty to save your life regardless if you have insurance or can pay. They can’t withhold life saving medicine or service while you are dying. They will stabilize you and send you off with a bill knowing they will never collect.
Another factor is the price must be the price. They can’t have price $x for insurance and $y for no insurance. Insurance is going to ask why and only pay out the lower amount. So hospitals have to have 1 price and that price needs to cover not only the procedure but also cover non payments from denied insurance claims or those without coverage that just don’t pay.
The US has made Health a commodity, subject to unbridled capitalist profiteering, charging whatever the market will bear, extorting patients when they are at their most vulnerable.
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