One of These Things Is Not Like the Others

by Dave Schuler on December 2, 2012

The chart above illustrates national healthcare spending as a percentage of per capita GDP for OECD countries. The discrepancy between U. S. healthcare spending can’t be explained by the differences in income or better outcomes.

There are several schools of thought on why healthcare spending in the U. S. is so high. One school believes that we pay higher prices because we don’t have a single payer or other nationalized system. My view is closer to believing that a single payer or other nationalized system would be unaffordably expensive in the United States unless we are willing to pay less for healthcare.

Said another way, it’s the prices, stupid.

{ 9 comments… read them below or add one }

steve December 2, 2012 at 12:05 pm

The prices, plus quite a few other problems, utilization being a major one. What still amazes me is how little we seem to care. Raise fees in France and they go riot. Ok, they seem to like to riot, but I think you get the point.

Steve

steve December 2, 2012 at 12:19 pm

Trust you saw this one. At a time without a bunch of blockbusters coming out, a bad economy and the rate of medical spending decreasing.

http://theincidentaleconomist.com/wordpress/chart-of-the-day-brand-vs-generic-drug-price-growth/

Steve

Dave Schuler December 2, 2012 at 12:29 pm

Trust you saw this one.

Yeah. Don’t blame me. I’ve been on record as favoring radical reform in intellectual property law for many years. And, yes, it’s a problem.

On the other hand, pharmaceuticals are a small component of total healthcare costs. About an eighth of the total. Cutting that in half or even eliminating it altogether doesn’t erase the discrepancy between our spending and that of other OECD countries.

jan December 2, 2012 at 3:55 pm

Unintended consequences? —> Obamacare’s medicaid time bomb.

Andy December 2, 2012 at 6:31 pm

I’ll just state my opinion again: I think the two most important things are:

1. Get employers out of the health insurance business.
2. Replace FFS with a scheme with incentives that better control costs.

steve December 2, 2012 at 6:46 pm

“Unintended consequences?”

Medicaid is the lowest cost comprehensive insurance available. You could go cheaper by just not insuring those people.

Steve

jan December 2, 2012 at 7:52 pm

Medicaid is the lowest cost comprehensive insurance available.

It may be compared to other types of available health insurance. But, according to this article it is not deemed ‘cheap,’ and is “rife with waste.” Bottom line is that anything that can’t be afforded by a person, state or federal government has problems attached to it, when it is simply forced onto said people or segments of society.

Jimbino December 2, 2012 at 9:42 pm

Andy is right, but I think healthcare costs would drop dramatically if:

1. All providers were forced to list prices for all services and to bill by by reference to CPT code, which always appears in the bills presented to insurance companies and Medicare/Medicaid.

2. Grant all patients Favored Nation status (meaning charge all comers the same), with discounts only for bulk or cash payments.

That’s what Walmart and my local liquor store do. When I go shopping at Harbor Freight, I am treated like anyone else and pay the same as anyone else for product. Not so in health care!

When I enter Harbor Freight, nobody people say hello instead of asking first thing if I have insurance, and I enter armed with the pricing for every product and most products come with lifetime guarantee.

In fact, we would rescue our system by just letting Harbor Freight (or Walmart) run our healthcare system, and especially hire the docs.

steve December 3, 2012 at 8:28 am

You have pretty much described heath care in France or Japan. You need a lot more docs to do this.

Steve

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