What Drives High US Healthcare Costs? Price or Utilization?

[rjsciurus]

Here's a data point for you: I got a 6-month prescription last year, the first ever. My Doctor named a well-known, widely used drug. Mistakenly thinking I had no prescription coverage (I never use it!), I asked about cheaper alternatives. Visibly surprised, she immediately changed to a generic that was, from my limited research later, essentially equivalent. A quick check of online drug advertisements indicated I was paying per month what the name brand would have cost per day. Round down to 20x if you'd like.

 

[dex]

Americans have more gym memberships than any other people. Americans smoke less than most other countries. I know we are not lazy; fat I don't know. Where I live I see darn few fat people but I read that there are a lot of them around.

Ha

World's Fattest Countries - Forbes.com
The U.S. weighs in at No. 9, with 74.1% of those over 15 years old considered overweight. But given that its population is nearly 20,000 times that of Nauru, clearly the U.S.’s size belies it rank.
++++
They are out there. I think a lot depends upon where you live if you see them

 

[rjsciurus]

If the insurance company can get the cost of the hospital visit at $2,000 why does average joe off the street have to pay $10,000?

They charge that because they can, obviously. It's often impractical or impossible (if you're ill or disabled), difficult (ever tried to fully decipher a complex medical bill afterwards? Now imagine beforehand.), and socially unacceptable to bargain for health care as an individual. This is a good example of a reasonable and beneficial regulatory role of government in modern society. US society is way behind the times, although some people are obviously making a lot of money off it.

 

[Gone4Good]

Americans have more gym memberships than any other people. Americans smoke less than most other countries. I know we are not lazy; fat I don't know. Where I live I see darn few fat people but I read that there are a lot of them around.

Ha

In any obesity study I can recall, the US always seems to rank near the top (most obese). And while we may have more gym memberships than any other people, how many actually use them regularly? On the other hand, whenever I travel overseas I tend to see a lot of people out walking and riding bicycles. Most U.S. cities and suburbs are set up in a way that actually discourages such activities. I think for some folks a long walk is defined as not being able to find a closer spot in the parking lot. Meanwhile, here is a picture I took of a parking lot in Amsterdam.

I'm making gross generalization, of course.

 

[Gone4Good]

It's often impractical or impossible (if you're ill or disabled), difficult (ever tried to fully decipher a complex medical bill afterwards? Now imagine beforehand.), and socially unacceptable to bargain for health care as an individual.

I've tried to ask the question "how much is this going to cost" before receiving care and rarely have I ever even been given an estimate. Even for things that are completely discretionary that I might choose not to do if they cost too much.

 

[Jay_Gatsby]

Americans have more gym memberships than any other people. Americans smoke less than most other countries. I know we are not lazy; fat I don't know. Where I live I see darn few fat people but I read that there are a lot of them around.

Ha

I'm a firm believer in preventative medicine. The best preventative medicines on the planet are exercise and a healthy diet. If more Americans did both, our health care costs would plummet dramatically. Unfortunately, we're "married" to our cars and our fast food.

There are many times that I've considered relocating to parts of the U.S. where people are more prone to exercise and eat right (e.g., Boulder, Colorado). Unfortunately, I wouldn't be as highly-compensated in such places. Perhaps DW and I will relocate once we ER.

 

[Patsweb]

Healthcare Reform urgently needed...

I believe that the hospitals and drs. pass on the costs incurred by the non-insured onto the ones who can pay or who have insurance. Also, from what I have read, administrative costs of insurance and billing (probably CEO's jets and salaries,too) make up a high percentage of what we pay. Not to mention what the industry is paying members of our Congress. See this link Consumer Watchdog - Health Insurers & Drug Companies Contributed $5.5 Million to Top 10 Senate and House Recipients Since 2005 and see if this doesn't anger you.
This seems like a good case for healthcare reform, particulary in favor of a single payer system where everyone will have affordable, health insurance; however, I can't help but wonder if it is at all possible when the members of Congress who are running the show are not only refusing to listen the Drs. and supporters of the single-payer option, but having them arrested. See this site:
Doctors, Single Payer Activists Arrested, Make History at Senate Finance Roundtable | Physicians for a National Health Program

I think that it is time that we let our members of Congress know that this is un-acceptable. They need to stand up for up and not just for who gives them the biggest contributions for re-election.

 

[Notmuchlonger]

I believe that the hospitals and drs. pass on the costs incurred by the non-insured onto the ones who can pay or who have insurance. Also, from what I have read, administrative costs of insurance and billing (probably CEO's jets and salaries,too) make up a high percentage of what we pay. Not to mention what the industry is paying members of our Congress. See this link Consumer Watchdog - Health Insurers & Drug Companies Contributed $5.5 Million to Top 10 Senate and House Recipients Since 2005 and see if this doesn't anger you.
This seems like a good case for healthcare reform, particulary in favor of a single payer system where everyone will have affordable, health insurance; however, I can't help but wonder if it is at all possible when the members of Congress who are running the show are not only refusing to listen the Drs. and supporters of the single-payer option, but having them arrested. See this site:
Doctors, Single Payer Activists Arrested, Make History at Senate Finance Roundtable | Physicians for a National Health Program

I think that it is time that we let our members of Congress know that this is un-acceptable. They need to stand up for up and not just for who gives them the biggest contributions for re-election.

So do you expect the hospital and doctors just absorb the costs of people who don't pay? They already have to do some of that. But yeah health care reform is certainly needed.

 

[jug]

High cost of US health care, hmm

Inefficiency in paperwork, a tangle of insurers and administrators to handle the mess. Lack of uniformity.

Defensive medicine, call for expensive tests to rule out stuff the Doc knows is not there, but if a small chance it is there, he is up creek.

Insurance to cover mistakes, leading into next comment.

Lawyers, ready to sue, not negotiate settlement. Adversary legal system.

Overabundance of diagnostic equiptment, ready to be used and encoraged to be used if underused. Again many tests given to rule out stuff doc knows is not likely to be there.

However, up side, great technology that will most likely reduce need for skilled physicians whereas techicians will be able to diagnose you just like they do a car and print out protocall for treatment. This is becoming the de-rigor and is firmly objected to by medical profession.

However, leave the well trained ones for the big tiime thinking and for 95% of the other cases, the techs will do just fne. Perhaps prices will go down.

Notice I didn't even touch on European system, just looked at ours.

jug

 

[bubba]

Not sure if this story is even of interest, but this is happening to a very close family friend. Lady, 70ish, diagnosed with a blood cancer which is destroying her bones (myeloma, I believe). She has no insurance, no money, no pension (social security only) but she told the doctor she wanted every measure taken to save her life. In the last month, she's had hospital stays, MRIs, PET scans, this scan, that scan, radiation treatments, ambulance transportation to/from the radiation center, hospital bed brought into the home, chemo, IV treatments of something to strengthen bones, and I could go on forever. She hasn't paid a dime, nor will she as she has no money and her Social Security check is used for daily expenses. And, I don't believe there is anything unique about this situation. Probaby goes on every day of the world in every hospital/clinic/doctor's office in the U.S.

I have mixed emotions. On the one hand, I think the world of this lady; she's been in my life since I was a very young child. On the other hand, how, without one red cent in your pocket, can you look a doctor straight in the face and say you want all measures employed to save your life. Maybe because you are aware that someone else is paying - who knows. And, while I hope and pray I'll never be in these shoes, who knows?

While I'm not privy to the exact way this treatment is being paid for, I believe, based on comments from the family members, "the government" is paying for everything.

Is this what we all want? Is this socialized medicine? It's a serious question; not trying to pick a fight. Sure, it sounds great to not worry about the cost and just order up whatever treatment you prefer based on the physician's diagnosis, but someone has to pay for the experts, technology, etc etc. Why would the best and brightest in the nation want to be involved in the medical field if they can't make a lot of money while making a signficant contribution to society?

 

[haha]

Not sure if this story is even of interest, but this is happening to a very close family friend. Lady, 70ish, diagnosed with a blood cancer which is destroying her bones (myeloma, I believe). She has no insurance, no money, no pension (social security only)

Why does she not have Medicare? I beleive that if you are eligible for SS, you are eligible for Medicare.

Ha

 

[bubba]

Why does she not have Medicare? I beleive that if you are eligible for SS, you are eligible for Medicare.

Ha

Well, I think she does have Medicare, but evidently you only have so many days you can stay in hospital under the Medicare plan, and I believe you are charged a % of all cost under Medicare (20%, maybe). My belief is that Medicaid pays for all the costs Medicare won't pay. I'm not old enough yet to participate in Medicare, so I don't know all the ins and outs.

But my mind struggles with contribute basically nothing (she has never had money/income to amount to anything) and take so much. Truly, I'm not being negative; just trying to wrap my mind around this situation and the health care debate going on in our nation.

 

[Meadbh]

how, without one red cent in your pocket, can you look a doctor straight in the face and say you want all measures employed to save your life?

I'm a doctor. My patients are babies, and many of them come from poor families. I get requests like this all the time. The health care team and the families try to make life or death decisions together based on ethical principles such as beneficence (doing good), nonmaleficence (avoiding harm) and justice (including individual and societal equity in allocating resources). It's often a challenging process, but it's respectful.

Is this what we all want?

If "we all" refers to US society, my observations would suggest no. The US is a highly individualist society, where "making it" is theoretically possible for everyone, but if you don't, it's sometimes assumed that it's because you didn't take advantage of opportunity. The reality is that some people will not be able to make the most of those opportunities due to a variety of personal and external challenges. On the other hand, in a highly collectivist society, most people would agree that there should be a "safety net" on the basis that access to health care is a societal good.

Why would the best and brightest in the nation want to be involved in the medical field if they can't make a lot of money while making a signficant contribution to society?

I don't work in the US, but I have done in the past. Personally, I need to be fairly reimbursed for my work, but money is not the only, or even the major, motivating factor in what I do. In the case of this lady, the physician and the hospital will build in an allowance for lower Medicare reimbursement for care into their business model. Paying clients will end up subsidizing this lady's care.

 

[bubba]

Meadbh, thank you for your comments. I continue to struggle processing (1) this serious illness of someone who has been in my life forever, and (2) the financial implications (elasticity of the safety net). It is very beneficial to hear the opinions of a medical professional.

 

[jug]

If "we all" refers to US society, my observations would suggest no. The US is a highly individualist society, where "making it" is theoretically possible for everyone, but if you don't, it's sometimes assumed that it's because you didn't take advantage of opportunity. The reality is that some people will not be able to make the most of those opportunities due to a variety of personal and external challenges. On the other hand, in a highly collectivist society, most people would agree that there should be a "safety net" on the basis that access to health care is a societal good.



I don't work in the US, but I have done in the past. Personally, I need to be fairly reimbursed for my work

The concept of individualistic goes right down the drain when a highly individiualistic person needs expensive health care, due to injury, illness, but mostly old age. He may have been the marlboro man paying his insurance premiums, but the big hit is being taken by the rest in society, spread among us all.

Here society pools together the resources to pay for the care, whether medicare, medicaid, private insurance, or hitting the uninsured with the big bill.

The fact is when we take off our politically tinted glasses and look at the what reality is, is that the society, the US for example, is the risk pool. Each of us in most emergencies will receive medical care. When you are young and healthy, you feel why should you pay for the old and sick, but reality again strikes, chances are you will get old and sick.

I for one believe that we all need to kick in our bucks early into the system, whether private or national, when we first start working, since we all are at risk, and any insurance fool knows, the more in the risk pool, the cheaper per capita it is.

As for being paid for services, I agree, as a doc, you should be fairly paid, and the system can sustain that.

jug

 

[Midpack]

The concept of individualistic goes right down the drain when a highly individiualistic person needs expensive health care, due to injury, illness, but mostly old age. He may have been the marlboro man paying his insurance premiums, but the big hit is being taken by the rest in society, spread among us all.

Here society pools together the resources to pay for the care, whether medicare, medicaid, private insurance, or hitting the uninsured with the big bill.

The fact is when we take off our politically tinted glasses and look at the what reality is, is that the society, the US for example, is the risk pool. Each of us in most emergencies will receive medical care. When you are young and healthy, you feel why should you pay for the old and sick, but reality again strikes, chances are you will get old and sick.

I for one believe that we all need to kick in our bucks early into the system, whether private or national, when we first start working, since we all are at risk, and any insurance fool knows, the more in the risk pool, the cheaper per capita it is.

As for being paid for services, I agree, as a doc, you should be fairly paid, and the system can sustain that.

jug

Your post highlights two thoughts...

1) (Really just restating) - politicians and other universal health care advocates love to tell us 'there are 47 million Americans without health care!' The fact is, those 47 milllion have health care (at least major/catastrophic) that is subsidized by them and every other American one way or another. So we're already paying pretty close to the full cost like other countries (we just get to pay a premium for administrative costs, more R&D, malpractice, obesity/lack of exercise/poor diets, med school loans, etc. - but I digress).

2) The system you describe is really another pay-as-you-go system like Soc Security, with the same demographic challenges. It's insurance, not savings or banking for your own personal health care expenses.

 

[Trek]

Hopefully the fixin' is beginning.

Private sector signs on for health care reform - May. 10, 2009

 

[Patsweb]

Hopefully the fixin' is beginning.

Private sector signs on for health care reform - May. 10, 2009

"pledge from the private sector could reduce the growth in health care spending by 1.5 percentage points a year, for a savings of $2 trillion over 10 years"

Well, this is a small concession, when you stop and think about the percentage that they are offering...seems like more PR than anything else.
Somehow, if you compare it to a retail store that offers to give you a 1.5 % discount, would you be overjoyed? However, the savings of
$2 trillion makes one wonder just how much money is really being spent and could possibly more be trimmed from future expenses.

 

[ERD50]

I think that it is time that we let our members of Congress know that this is un-acceptable. They need to stand up for up and not just for who gives them the biggest contributions for re-election.

As long as 98.6% of the voters vote for one of the two dominant political parties, things will go on as they have.

-ERD50

 

[Martha]

Well, I think she does have Medicare, but evidently you only have so many days you can stay in hospital under the Medicare plan, and I believe you are charged a % of all cost under Medicare (20%, maybe). My belief is that Medicaid pays for all the costs Medicare won't pay. I'm not old enough yet to participate in Medicare, so I don't know all the ins and outs.

But my mind struggles with contribute basically nothing (she has never had money/income to amount to anything) and take so much. Truly, I'm not being negative; just trying to wrap my mind around this situation and the health care debate going on in our nation.

Yes, because she is elderly if she is poor enough she will be eligible for Medicaid. Medicaid is always short of money so who they cover is restricted, being poor alone is not enough.

 

[Martha]

Your post highlights two thoughts...

1) (Really just restating) - politicians and other universal health care advocates love to tell us 'there are 47 million Americans without health care!' The fact is, those 47 milllion have health care (at least major/catastrophic) that is subsidized by them and every other American one way or another. So we're already paying pretty close to the full cost like other countries (we just get to pay a premium for administrative costs, more R&D, malpractice, obesity/lack of exercise/poor diets, med school loans, etc. - but I digress).

Not according to what I have read. Hospitals have to treat emergencies to the point of stabilization, but they don't provide ongoing care. Chemo. Drugs for heart disease. Etc. Sometimes there are sources, but often there are not. Choices are made. Delay going to the doctor because you can't afford to pay. Other people bankrupt themselves paying for care. About 18,000 people a year die as a result of not getting care due to inability to pay for the care. Diabetics who don't get their drugs. People who are depressed but don't get treated and commit suicide. People with heart disease. People with cancer. Etc.