Why an MRI costs $1080 in America and $280 in France

[gerrym51]

americans like the speed of our healthcare system but don't like the price.


Canadians like the price of their healthcare system but don't like the speed.



LOL

[nvestysly]

Interesting article and it certainly touches on many of the aspects that need to be addressed. There is plenty of room for improvement in the U.S. health care system. IMO we need to understand that medical insurance and health care are two different things and society needs to understand they are different animals although they are very much interrelated.

See the 2009 Atlantic Article for some very good insight into why we spend so much in the U.S. I think there may be another thread on this article but I thought it worth mentioning here.

Now on the to Canadian thing... I recently met a very pleasant, seemingly reasonable couple from Canada. DW and I spent the better part of two weeks working side-by-side with this couple on a volunteer project in N.M. They told me about all the great aspects of the Canadian health care system. They enlightened me on a number of matters but I'm still not buying into their story. Particularly when the woman was going to Mexico to have some dental work performed. I don't care how good the doctors are in Mexico - I have nothing against Mexico - but if the health care is so great in Canada why does a person go to Mexico for dental work?

[Meadbh]

Quote:

Originally Posted by nvestysly Now on the to Canadian thing... I recently met a very pleasant, seemingly reasonable couple from Canada. DW and I spent the better part of two weeks working side-by-side with this couple on a volunteer project in N.M. They told me about all the great aspects of the Canadian health care system. They enlightened me on a number of matters but I'm still not buying into their story. Particularly when the woman was going to Mexico to have some dental work performed. I don't care how good the doctors are in Mexico - I have nothing against Mexico - but if the health care is so great in Canada why does a person go to Mexico for dental work?

Because dental work is not part of Canadian medicare. It should be, but it isn't.

[pb4uski]

Quote:

Originally Posted by Koolau ....For instance, the article is one of the few which puts at least part of the "blame" on the governments (or collectives or whatever you want to call it) of OTHER countries who piggy-back off of US investment and research. You rarely see this piece of the puzzle. It's not the whole story, but it's usually ignored when folks debate the issue (it's easier to just blame those "evil fill-in-the-blank").....

I recall reading something about this recently. What if there were a law preventing US drug and medical device companies from charging any less for their products sold abroad than they charge in the US. On other words, they would be precluded from gouging US consumers to the benefit of non-US consumers and would be required to spread the cost of R&D to all customers who benefit from it. Sounds fairer to me, but I concede that the devil is in the details.

[itsmyparty]

Quote:

Originally Posted by kramer Just a few data points: My Canadian friend recently got a knee MRI done at Bumrungrad Hospital in Bangkok for about $475. That included a very detailed interpretation and consult. I had a visiting French friend go to Bumrungrad for an emergency 3 years ago and he needed an emergency MRI on his head/brain and it was going to be $600 (presumably with consult included). The wait for both of these procedures was essentially zero time. Also, as another data point, my Canadian friend above actually injured his knee 3 years ago on a motorbike visiting me. He only spends 5 months per year in Canada, but could not get an MRI in that time during his last two years there (he spends 5 months per year there, the minimum to maintain medical coverage in Ontario). The waiting list is longer than 5 months in Toronto if it is not urgent. That is why he finally got it done in Thailand two and a half years after the original accident, because it was really causing him some pain and inconvenience. Another data point: Canada will pay for this MRI and consult that he got done in Thailand. Also, he is bringing all the medical results back to Canada when he returns and he may get a surgery done in Canada.

My cousin who lives in British Columbia told me is a Canadian who goes to the US to get tests done like MRIs or sonograms, etc. because they do not want to wait a year+ in that province for a diagnosis, not only will the Canadian govt not pay for the tests, but no Cdn doctors will use those results in their treatment. Maybe its different if the govt actually sent the person for tests, dont know. Anyway...that's what was told to me when I asked why a person in a lot of pain and having great difficulty walking whose Mri was scheduled for about 12 mo. Months in future, wouldnt just drive a few hrs to the US to get the test done quickly, even if it wasnt paid by govt. they could personally afford it...what better use for one's $? This was in Victoria, BC 2012.

[Koolau]

Quote:

Originally Posted by pb4uski I recall reading something about this recently. What if there were a law preventing US drug and medical device companies from charging any less for their products sold abroad than they charge in the US. On other words, they would be precluded from gouging US consumers to the benefit of non-US consumers and would be required to spread the cost of R&D to all customers who benefit from it. Sounds fairer to me, but I concede that the devil is in the details.

We already know the answer to this. The other countries have made it clear that they would no longer honor US patents and would make the items themselves. If that happened, it would be assumed that the other countries would soon be selling their cut-rate products to the US market, either with the tacit approval of the US gummint (the wusses) or, more likely, through some sort of gray or black market (like folks buying their US made products from Canada for less money - because Canada sets the prices lower.) The effect would be the same. Eventually, US companies would stop innovation since their patents are no longer honored. It's a bad deal all around. But the US won't fight this battle. Just as they won't fight the Chinese over patent violations that have been documented. (Yeah, I know. Once in a while they seize a ton or two of knock-offs - but it's not priority.)

So US innovation is subsidizing the world - and it's not just in the pharma industry. But the pharma industry is the last big R&D driven industry in which the US still dominates. That won't last much longer because US citizens (and therefore their government) are getting tired of subsidizing everyone else. We'll kill the goose that laid the golden egg and then wonder why there are no longer golden eggs available. (As Joni Mitchell sang "You don't know what you've got 'til it's gone.") Of course, YMMV.

[pb4uski]

I guess the question then becomes whether it is better to do without innovation or let the scofflaws have a free ride. Hard one. I might prefer to do without.

[explanade]

Um, a lot of the Big Pharma companies are in fact foreign companies.

Which still nevertheless use NIH-funded research for a lot of their products.

Didn't someone cite earlier in this thread that they only spend 12% of their revenues on R&D?

They spend more on marketing and advertising, like all the Cialis and Viagra commercials running on TV. Or as noted in another thread, hiring former beauty pageant contestants to call on doctors to prescribe their drugs.

There's more credit being given for "innovation" in the pharmaceuticals industry than there actually is.

[eridanus]

Quote:

Originally Posted by explanade Um, a lot of the Big Pharma companies are in fact foreign companies.

Yes. In fact, foreign Big Pharma spent slightly more in R&D than US Big Pharma.

Bigpharma R&D spend activity

Quote:

Which still nevertheless use NIH-funded research for a lot of their products.

How much NIH money is actually given to Big Pharma? I keep hearing/reading that "the US innovates" but there are no numbers.

Sanofi made $28B in revenue from pharma last year and less than $11B of that came from the US. They spent $11B on R&D. How do we tease out the numbers to find the innovation directly from US sales?

Sanofi - Sales by business and region

The top 10 Big Pharma spent about $60B on R&D. The NIH budget is ~$31B/year but not all (little?) of that is Big Pharma (see the Hopkins article below).

Quote:

There's more credit being given for "innovation" in the pharmaceuticals industry than there actually is.

Agreed.

Federal Government and Big Pharma seen as Increasingly Diminished Source of Research Funding - 11/26/2012

"He says they [pharma & drug device companies] are, understandably, spending research dollars on projects most likely to yield short-term returns, even at the expense of investment in diseases that are severe, common and cannot be prevented or treated effectively."

[eridanus]

As an addendum, I found this,

Industrial R&D

Quote:

Even with the ongoing reductions in R&D spending by some of the largest U.S. life science firms, we forecast a slight 1.4% increase in total U.S. life science R&D to $82.7 billion in 2013. This U.S. growth, combined with similar lower levels of growth among European life science firms, but significant growth among Asian life science firms, will lead to 2013 global life science R&D spending of $189.2 billion, a forecast increase of 4.2% from 2012 to 2013.

The US funds 43% of the worldwide R&D funding in life sciences (in corporations). This is by far the most of any other country but the rest of the world does more in aggregate. Are even these foreign R&D costs borne by American consumers, considering that American revenue for Sanofil is 39% (for example)?

What we really need to see is the breakdown of American revenues vs. profits vs. R&D. The OP's article stated that only 12% went to R&D.

[NYEXPAT]

Here in Lima, you can walk in off the street and get a MRI for S/.400 ($155.00). I know many Canadians who come down to get one and than send the results back home.

[explanade]

I think more interesting than the profits of pharmaceuticals would be the profits of hospitals in the US vs. those in other countries.

Of course, what makes it difficult is that a lot of US hospitals are "non-profit" but still generate a lot of money (and pay no taxes?). And in other industrialized countries, hospitals are run by govt. entities.

Also compare compensation of doctors and nurses here and abroad.

In the '60s, it's said that when Canada was considering adopting single-payer, there were a lot of warnings that Canadian doctors would immigrate to the US. In fact, the AMA went up there to spread this campaign. Presumably, there was no mass exodus.

[Meadbh]

Quote:

Originally Posted by explanade In the '60s, it's said that when Canada was considering adopting single-payer, there were a lot of warnings that Canadian doctors would immigrate to the US. In fact, the AMA went up there to spread this campaign. Presumably, there was no mass exodus.

You presume correctly.

http://www.cfhi-fcass.ca/Migrated/PDF/myth29_e.pdf

[Koolau]

Quote:

Originally Posted by explanade Um, a lot of the Big Pharma companies are in fact foreign companies. Which still nevertheless use NIH-funded research for a lot of their products. Didn't someone cite earlier in this thread that they only spend 12% of their revenues on R&D? They spend more on marketing and advertising, like all the Cialis and Viagra commercials running on TV. Or as noted in another thread, hiring former beauty pageant contestants to call on doctors to prescribe their drugs. There's more credit being given for "innovation" in the pharmaceuticals industry than there actually is.

Regarding OUS Big Pharma companies: True, there are still some Big Pharma companies OUS. But many of them have merged with US Pharma corps. Much of the innovation which accrues to the "foreign" companies is actually done in the US.

The 12% figure that gets bounced around about Big Pharma is in the eye of the beholder. Depends on who is calculating it (and what they use the value for - could even be for political reasons). I'm not an expert on this subject, but I would be very cautious about basing major "political" decisions on that 12% figure. True enough, Big Pharma has it's stake in you believing the number is higher than 12%. So, again, I'm just suggesting we don't buy one number as if it's gospel. I don't have a better number so I'll say no more about the 12%.

It's true that NIH and (so called) tax supported universities do a lot of research for pharma companies. Much of that gets paid for by pharma and there are grants made for specific projects from pharma. So while pharma DOES build on other's research, it's not ALL or even mostly done outside. The BIGGGGGG thing that costs pharma a ton of money is so-called "DEVELOPMENT". It can easily cost $1 Billion dollars to get a drug to market, counting the initial research (in-house or purchased). The biggest costs are to "please" the FDA with ever more studies. It used to be that pharma could use several hundred patients to research safety and efficacy. Now, it typically exceeds 10,000. Protocols for which the gummint and pharma have agreed for the testing can be changed at the (literally) whim of the gummint. Pharma can't have approval without the FDA, so FDA sets the rules (as it goes). Now, please don't misunderstand. We ALL want safe and effective drugs. I personally do not "trust" Big Pharma to be altruistic and produce such drugs without "guidance" (and a big ugly stick). Having said that, having an FDA which is more political than scientific costs US more money when it comes time to purchasing our drugs. The Pharma Companies won't eat those costs. They'll charge us one way or the other. Like I say, they aren't in it to "help" people, they are in it to make money. (I'd like to think most of the PEOPLE in these companies are just like you and I. THEY do indeed do it to help people - as well as to earn a pay check.)

Regarding marketing - I agree that there is way too much of that. Still, I pointed out drug marketing led to a very swift switch from ulcer surgery to ulcer prevention. (I just happen to know about this particular issue). Most other drugs are "over marketed" - but realistically, selling these drugs makes it possible to make new ones. I'd personally rather see some better way of funding such things, but the profit motive has ALWAYS been more successful in bringing new (and usually) better drugs to market than the gummint. Putting the gummint in charge of whether you get a cure for (insert disease here) would seem just about like putting the USPS up against UPS or FEDX. Yes, USPS does deliver the mail, but...

I don't know how to split out the "credit" for who does the innovation. Big as Big Pharma is, they DO DEPEND to some extent upon start-up companies, universities, independent labs, gummint labs, NIH, etc. etc. to get started on a promising compound. It's the Big Pharma that USUALLY sees the potential in what is often BEGUN at these other places. It's also Big Pharma which learns how to make these compounds in sufficient quantity and at low enough price to be viable. So, I'll not argue the point, but say the answer isn't as clear as your statement. For instance, I simply suggest that Big Pharma does indeed do a lot of R&D. Don't think I ever suggested they did it all nor more than anyone else, etc. We NEED all of the various researchers to look for ever more difficult to find drugs to treat ever more difficult to cure illnesses. Big Pharma will gladly take more than their share of the credit, but I didn't give it to them. Still, without Big Pharma, we won't be getting affordable (a relative term) cures/treatments for all kinds of diseases - again, unless you want to turn it over to the folks who brought you the post office and (fill in the blank). I'm not a cheerleader for Big Pharma. I just think they tend to get a bad rap - like BIG (FILL IN THE BLANK). They make a ton of money and a lot of people resent that. I say, if you think Big Pharma (or Big Oil, or Big Food, or Big Three, or Big Anything) seems to have a "lock" on something, you think they can "print" money, you think they have near monopoly, then don't complain about it. BUY THEIR BLOODY STOCK! If you don't then maybe you have doubts about your own view of their "power" and ability to manipulate markets, or take some sort of unfair advantage. If you think Big Pharma is a sure thing, you need to ask how many shares you own.

I've been vocal about this subject because I know at least a little bit about it from tangential involvement in the industry. BUT, if it sounds like I'm a cheerleader, it's the same way I feel about Big Oil finding a huge lake of oil under the Dakotas (or where ever). Yes, they'll make a ton of profit from it, but, in my life time, we are unlikely to run out of oil. I see that as a good thing. Let's not knock Big Pharma either. Both parents had alzheimers. I pray every day that Big Pharma will make an OBSCENE PROFIT from selling ME a drug that will prevent that disease. Of course (and as always) YMMV.

[bondi688]

Why does an MRI cost $1080 in the US?

Maybe because BMWs and houses in guarded gated communities are expensive.

[Malcolm2]

Sadly, there are two huge problems in America which keeps costs sky high. Both of these are not routinely seen in most other countries. The first is the runaway tort actions allowed, and encouraged in our system. The second is the much longer FDA approval time frames for drugs. Of course, it is easier to say the drug and medical device companies are gouging, if you are avoiding tort reform.
it is the elephant in the room.

[explanade]

Malpractice accounts for a few billion, a tiny slice of the trillions spent annually in health care spending.

"Defensive medicine" is harder to quantify, partly because in a lot of cases there are economic incentives for providers to order more tests and procedures.

What is more clear are the price differentials, like the same drugs being much cheaper across the border in Canada, or MRIs being much cheaper in other countries, though the machines come from the same cos.

Oh and Congress passed a law prohibiting Americans near the Canadian border from buying their prescription drugs in Canada. Whom do you think that law was passed for?

We know how lobbyists have corrupted the political system, which tries to protect all these industries reap outsized profits.