Why Are Medical Costs So High?

[mRx 16]

Well, that doesn't quite explain how the procedure for which the good doc "needs" to pull in three grand is done for half that in any other developed country around the world. That, I think, is where some of the problem lies. The article also doesn't quite account for the fact that the procedure which needs to bring in three grand is billed at 9,000 to the uninsured while insurance companies get a discount on the same procedure and are only on the hook for 2k or less.

Case in point, a friend of mine who broke her ankle and had to have surgery done to fix the mess. Hospital billed a whopping 17k for the deal. The private insurance contract allowed for a little over 4k which is what the hospital got paid. Case in point, my wife's pregnancy beginning to end was billed at over 35k. After negotiated discounts, the private insurance paid just over 7k.

No medicare and medicaid here. No taxpayer.

The article is BS!

Medicare/Medicare and liability insurance are contributors to the whopping cost, but they are not the original sin. The partnership of State and Medicine is.

The American Medical Association has restricted the supply of medical professionals through control of medical schools and their admittance policies. State licensure also furthers the restriction. This gives the few complete control over the medical market. It's a monopoly, plain and simple. The basic market mechanism of supply/demand tells you that this will cause prices to skyrocket. Everything else is just icing on the cake, but not the cake itself.

It really is a brilliant scam, because somehow we are convinced that we can solve this problem with more of the very thing that caused the problem to begin with.

The article is not BS. You just have to see through to the real issue.

I see you're still avoiding the question how any other developed country manages to keep medical costs lower while sporting more government internvention than we do here.

They are less restrictive on medical student admittance. I would say most developed countries aren't forced into a doctor shortage. Hell, many non-western countries aren't restricting the supply of doctors. Increased supply, more choices, competition= lower prices.

Not avoiding any questions man, just thought you could connect the dots without me spelling it out.

[mRx 16]

I can understand the temptation to blame the government for everything, but how would this proposed cash-based system work for the millions of people who have chronic conditions or serious diseases that require a lot of care? Should a cancer patient of average means have to haggle with a doctor about getting affordable chemo and surgery?

If they had choices, they wouldn't have to haggle. The doctor would charge what he wanted, and the person would either accept or not. If it is unreasonable, then the patient would go elsewhere. If the majority found this particular doctor's fee's unreasonable, then he would lose revenue, and eventually, either be forced out of business, or forced to lower prices to compete.

I'm not saying the first step would be to eliminate government provided healthcare. The first step would be to take the power away from the AMA medical cartel from controlling/monopolizing the market. Then gradually reduce medicare/medicaid in coincidence with the resulting cost reduction caused by the introduction of competition in the medical field. At least that would be a start.

[Empress of Groovy 373]

I can understand the temptation to blame the government for everything, but how would this proposed cash-based system work for the millions of people who have chronic conditions or serious diseases that require a lot of care? Should a cancer patient of average means have to haggle with a doctor about getting affordable chemo and surgery?

If they had choices, they wouldn't have to haggle. The doctor would charge what he wanted, and the person would either accept or not. If it is unreasonable, then the patient would go elsewhere. If the majority found this particular doctor's fee's unreasonable, then he would lose revenue, and eventually, either be forced out of business, or forced to lower prices to compete.

It's more likely that the person who can't afford what the doctor is charging will go into debt (having no insurance) or forgo care entirely. As with current drug pricing, many people who can't afford expensive medication cut their pills in half or go without, but those who can afford them make up the difference plus a profit. If a pharmaceutical company can get 5 people to pay $100 a pill, they still end up w/ higher profits than getting 10 people to pay $25 a pill. It's just sad that the same system that determines the price of sneakers and electronics is applied to medical care, and a lot of people die as a result.

Another consideration is that the article mentions nothing about the price of common medical procedures compared against other personal financial indices. The hypothetical procedure mentioned in the article is $3,000. Because Medicare and Medicaid also cover it, we can assume that it's considered a medically necessary procedure, as opposed to a cosmetic procedure. $3K is a lot of money to most people. Perhaps it's the first of several procedures a patient needs, plus therapy and meds. Pretty soon, even the "bargain basement" prices (cumulatively) could exceed the price of a new car, or a house.

A system like the one this author proposes simply wouldn't work for the average person because the costs we're talking about are still enormous when one considers the cost of other necessities and average earnings.

[Mr. Big Dog 10,747]

Well, that doesn't quite explain how the procedure for which the good doc "needs" to pull in three grand is done for half that in any other developed country around the world. That, I think, is where some of the problem lies. The article also doesn't quite account for the fact that the procedure which needs to bring in three grand is billed at 9,000 to the uninsured while insurance companies get a discount on the same procedure and are only on the hook for 2k or less.

Case in point, a friend of mine who broke her ankle and had to have surgery done to fix the mess. Hospital billed a whopping 17k for the deal. The private insurance contract allowed for a little over 4k which is what the hospital got paid. Case in point, my wife's pregnancy beginning to end was billed at over 35k. After negotiated discounts, the private insurance paid just over 7k.

No medicare and medicaid here. No taxpayer.

The article is BS!

Medicare/Medicare and liability insurance are contributors to the whopping cost, but they are not the original sin. The partnership of State and Medicine is.

The American Medical Association has restricted the supply of medical professionals through control of medical schools and their admittance policies. State licensure also furthers the restriction. This gives the few complete control over the medical market. It's a monopoly, plain and simple. The basic market mechanism of supply/demand tells you that this will cause prices to skyrocket. Everything else is just icing on the cake, but not the cake itself.

It really is a brilliant scam, because somehow we are convinced that we can solve this problem with more of the very thing that caused the problem to begin with.

The article is not BS. You just have to see through to the real issue.

I see you're still avoiding the question how any other developed country manages to keep medical costs lower while sporting more government internvention than we do here.

They are less restrictive on medical student admittance. I would say most developed countries aren't forced into a doctor shortage. Hell, many non-western countries aren't restricting the supply of doctors. Increased supply, more choices, competition= lower prices.

Not avoiding any questions man, just thought you could connect the dots without me spelling it out.

They're less restrictive? They don't have doctor shortages? Can you back that assumption up?

Not to be difficult but I am hesitant to try and connect dots that aren't there.

[one...two...tree 2,762]

National Healthcare Costs

The Impact of Rising Health Care Costs

• National surveys show that the primary reason people are uninsured is the high cost of health insurance coverage.²
• Economists have found that rising health care costs correlate to drops in health insurance coverage.⁸
• Nearly one-quarter (23 percent) of the uninsured reported changing their way of life significantly in order to pay medical bills.⁹
• In a Wall Street Journal-NBC Survey almost 50 percent of the American public say the cost of health care is their number one economic concern.¹⁰
• In a USA Today/ABC News survey, 80 percent of Americans said that they were dissatisfied (60 percent were very dissatisfied) with high national health care spending.¹¹
• Rising health care costs is the top personal pocketbook concern for Democratic voters (45%) and Republicans (35%), well ahead of higher taxes or retirement security.¹²
• One in four Americans say their family has had a problem paying for medical care during the past year, up 7 percentage points over the past nine years. Nearly 30 percent say someone in their family has delayed medical care in the past year, a new high based on recent polling. Most say the medical condition was at least somewhat serious.
• A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses.¹³ Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.
• One half of workers in the lowest-compensation jobs and one-half of workers in mid range-compensation jobs either had problems with medical bills in a 12-month period or were paying off accrued debt. One-quarter of workers in higher-compensated positions also reported problems with medical bills or were paying off accrued debt.¹⁴
• If one member of a family is uninsured and has an accident, a hospital stay, or a costly medical treatment, the resulting medical bills can affect the economic stability of the whole family.¹⁵
• A new survey shows that more than 25 percent said that housing problems resulted from medical debt, including the inability to make rent or mortgage payments and the development of bad credit ratings.¹⁶
• A survey of Iowa consumers found that in order to cope with rising health insurance costs, 86 percent said they had cut back on how much they could save, and 44 percent said that they have cut back on food and heating expenses.¹⁷
• Retiring elderly couples will need $200,000 in savings just to pay for the most basic medical coverage.¹⁸ Many experts believe that this figure is conservative and that $300,000 may be a more realistic number.
• According to a recent report, the United States has $480 billion in excess spending each year in comparison to Western European nations that have universal health insurance coverage. The costs are mainly associated with excess administrative costs and poorer quality of care.¹⁹
• The United States spends six times more per capita on the administration of the health care system than its peer Western European nations.¹⁹Time for Action on Reining in Health Care Costs

  Policymakers and government officials agree that health care costs must be controlled. But they disagree on the best ways to address rapidly escalating health spending and health insurance premiums. Some favor price controls and imposing strict budgets on health care spending. Others believe free market competition is the best way to solve the problems. Public health advocates believe that if all Americans adopted healthy lifestyles, health care costs would decrease as people required less medical care.

  There appears to be no agreement on a single solution to health care’s high price tag. Many approaches may be used to control costs. What we do know is if the rate of escalation in health care spending and health insurance premiums continues at current trends, the cost of inaction will severely affect employer’s bottom lines and consumer’s pocketbooks.

  http://www.nchc.org/facts/cost.shtml

Edited December 1, 2008 by Mister Fancypants

[greeneyedgirlfl 0]

The health insurance benefits I receive from my employer have declined in the last 5 years; my deductibles, prescription costs, and co-pays have tripled. Many working Americans (myself included) are one catastrophic illness away from debt from which they will never recover.

I know we are great at leveling blame...

Does anyone have any constructive ideas to solve the issue?

[mRx 16]

The health insurance benefits I receive from my employer have declined in the last 5 years; my deductibles, prescription costs, and co-pays have tripled. Many working Americans (myself included) are one catastrophic illness away from debt from which they will never recover.

I know we are great at leveling blame...

Does anyone have any constructive ideas to solve the issue?

1. Take the power away from the AMA medical cartel from controlling/monopolizing the market, allow the free market to determine how many doctors are needed. Then gradually reduce medicare/medicaid in coincidence with the resulting cost reduction caused by the introduction of competition in the medical field.

2. Take the power away from the FDA in determining which drugs are "approved" to treat your illness. Why are antibiotics so controlled in the US? To drastically reduce supply. That's why drugs cost incredibly more here than overseas. Because other countries haven't fully realized the power of controlling the medical drug trade. Europe is getting the hint though. (by outlawing certain vitamins). Seriously, I got pink eye when I was in Thailand, and I went to a corner pharmacy, and got amoxycillin and eye drops, and was cured within 2 days. The cost.... under 5USD Let pharmacists determine remedies, not the FDA.

3. Gradually get rid of the government medical insurance agency. Allow non-subsidized insurance companies to compete with the government insurance companies. Insurance litigation and negotiation accounts for 25% of every dollar of medical costs that you pay. This reduces the amount of face time you get with your doctor.

Steps toward a free healthcare system is the only way to an everlasting America. At the current rate, the USA will bankrupt long before I can draw any care from the money that I've had forfeited.

[mRx 16]

Well, that doesn't quite explain how the procedure for which the good doc "needs" to pull in three grand is done for half that in any other developed country around the world. That, I think, is where some of the problem lies. The article also doesn't quite account for the fact that the procedure which needs to bring in three grand is billed at 9,000 to the uninsured while insurance companies get a discount on the same procedure and are only on the hook for 2k or less.

Case in point, a friend of mine who broke her ankle and had to have surgery done to fix the mess. Hospital billed a whopping 17k for the deal. The private insurance contract allowed for a little over 4k which is what the hospital got paid. Case in point, my wife's pregnancy beginning to end was billed at over 35k. After negotiated discounts, the private insurance paid just over 7k.

No medicare and medicaid here. No taxpayer.

The article is BS!

Medicare/Medicare and liability insurance are contributors to the whopping cost, but they are not the original sin. The partnership of State and Medicine is.

The American Medical Association has restricted the supply of medical professionals through control of medical schools and their admittance policies. State licensure also furthers the restriction. This gives the few complete control over the medical market. It's a monopoly, plain and simple. The basic market mechanism of supply/demand tells you that this will cause prices to skyrocket. Everything else is just icing on the cake, but not the cake itself.

It really is a brilliant scam, because somehow we are convinced that we can solve this problem with more of the very thing that caused the problem to begin with.

The article is not BS. You just have to see through to the real issue.

I see you're still avoiding the question how any other developed country manages to keep medical costs lower while sporting more government internvention than we do here.

They are less restrictive on medical student admittance. I would say most developed countries aren't forced into a doctor shortage. Hell, many non-western countries aren't restricting the supply of doctors. Increased supply, more choices, competition= lower prices.

Not avoiding any questions man, just thought you could connect the dots without me spelling it out.

They're less restrictive? They don't have doctor shortages? Can you back that assumption up?

Not to be difficult but I am hesitant to try and connect dots that aren't there.

The dots are there my friend.

- We pay more than any other country for healthcare, yet we don't receive better care correlating to the increased price.

- The FDA controls what drugs it allows pharmacists to issue, transferring control of your health from medical professionals to bureaucrats.

- Medicare/ Medicaid/ and other conglomerate government insurance industries have divorced you from your doctor. Most of these institutions are quasi-governmental, as Big Agnes! has pointed out. So the benefactors of such policies are the corporate lobbyists, and certain select, weak, spineless congressmen. Medicare serves to monopolize the insurance industry through subsidies.

But the divine scheme is to make you believe that full government control will make you better off, and make you pay less. This is laughable. America is in the "live for the moment" mindset, so while full government control of your health may work for the time being, it is unsustainable.

Perhaps other countries have better healthcare than us because they:

1. have less restriction (medical applicants, Patient/Doctor ratio)

2. more taxation to subsidize medical care

3. No trillion dollar yearly war, and staggering 50+ trillion national debt.

4. more options for healthcare ( homeopathic remedies, home childbirth)

But if I'm still not directly answering your question, take a look at Belgium, they have an average of 200:1 patient doctor ratio, ( we have anywhere from 470-1100 per doctor, depending on your source), they allow more options for alternative homeopathic healthcare, and they do not have a crippling GWOT.

Yet they are considered to be more "regulated" than we are..... I think not.

[Danno 1,228]

(Just like in the days of Katrina)

"Even when Government fails them at every level, Still the people demand more of it".

[Trumplestiltskin 5,791]

(Just like in the days of Katrina)

"Even when Government fails them at every level, Still the people demand more of it".

The lesson being - that you should demand higher standards from the people you elect

[Mr. Big Dog 10,747]

Well, that doesn't quite explain how the procedure for which the good doc "needs" to pull in three grand is done for half that in any other developed country around the world. That, I think, is where some of the problem lies. The article also doesn't quite account for the fact that the procedure which needs to bring in three grand is billed at 9,000 to the uninsured while insurance companies get a discount on the same procedure and are only on the hook for 2k or less.

Case in point, a friend of mine who broke her ankle and had to have surgery done to fix the mess. Hospital billed a whopping 17k for the deal. The private insurance contract allowed for a little over 4k which is what the hospital got paid. Case in point, my wife's pregnancy beginning to end was billed at over 35k. After negotiated discounts, the private insurance paid just over 7k.

No medicare and medicaid here. No taxpayer.

The article is BS!

Medicare/Medicare and liability insurance are contributors to the whopping cost, but they are not the original sin. The partnership of State and Medicine is.

The American Medical Association has restricted the supply of medical professionals through control of medical schools and their admittance policies. State licensure also furthers the restriction. This gives the few complete control over the medical market. It's a monopoly, plain and simple. The basic market mechanism of supply/demand tells you that this will cause prices to skyrocket. Everything else is just icing on the cake, but not the cake itself.

It really is a brilliant scam, because somehow we are convinced that we can solve this problem with more of the very thing that caused the problem to begin with.

The article is not BS. You just have to see through to the real issue.

I see you're still avoiding the question how any other developed country manages to keep medical costs lower while sporting more government internvention than we do here.

They are less restrictive on medical student admittance. I would say most developed countries aren't forced into a doctor shortage. Hell, many non-western countries aren't restricting the supply of doctors. Increased supply, more choices, competition= lower prices.

Not avoiding any questions man, just thought you could connect the dots without me spelling it out.

They're less restrictive? They don't have doctor shortages? Can you back that assumption up?

Not to be difficult but I am hesitant to try and connect dots that aren't there.

The dots are there my friend.

- We pay more than any other country for healthcare, yet we don't receive better care correlating to the increased price.

- The FDA controls what drugs it allows pharmacists to issue, transferring control of your health from medical professionals to bureaucrats.

- Medicare/ Medicaid/ and other conglomerate government insurance industries have divorced you from your doctor. Most of these institutions are quasi-governmental, as Big Agnes! has pointed out. So the benefactors of such policies are the corporate lobbyists, and certain select, weak, spineless congressmen. Medicare serves to monopolize the insurance industry through subsidies.

But the divine scheme is to make you believe that full government control will make you better off, and make you pay less. This is laughable. America is in the "live for the moment" mindset, so while full government control of your health may work for the time being, it is unsustainable.

Perhaps other countries have better healthcare than us because they:

1. have less restriction (medical applicants, Patient/Doctor ratio)

2. more taxation to subsidize medical care

3. No trillion dollar yearly war, and staggering 50+ trillion national debt.

4. more options for healthcare ( homeopathic remedies, home childbirth)

But if I'm still not directly answering your question, take a look at Belgium, they have an average of 200:1 patient doctor ratio, ( we have anywhere from 470-1100 per doctor, depending on your source), they allow more options for alternative homeopathic healthcare, and they do not have a crippling GWOT.

Yet they are considered to be more "regulated" than we are..... I think not.

1.) Both Canada (470:1) and Australia (400:1) have a higher patient / doctor ratio than the US (390:1) and yet don't spend anywhere near as much to get anywhere near as little in return.

2.) I don't think it's about more taxation but about moving medical care from the emergency room back to the doctors office. People need reasonable access to preventive and early care (relatively inexpensive) to avoid unneccesary and costly trips to the ER (which the insured and the taxpayer fund today). This would do wonders in terms of bringing cost down.

3.) No argument there.

4.) No argument there either.

[NickD 203]

Ha, listened to a medical director partially on PBS talk radio yesterday on this subject, he doesn't know why. Malpractice was brought up, but in the state of Wisconsin last year, only 40 claims were made with only two being awarded, but didn't give the buck amount for the awards, they never do that.

He speculated on the doctors costs of dealing with multiple insurance costs, takes extra people to file claims and in many cases fight them. But not in my experience, have to fight the insurance companies myself, if they don't pay, I pay, and they can take your house away if you don't. If you have a house.

Also said uninsured are using emergency services excessively, well my wife did work in patient assistance and sets up payment plans for these people, but dumb to go in anyway for common health problems, like a cold and costs them a small fortune. I would have to be on my death bed before going into emergency, and since I have three doctors in my family, they do not use the best doctors in emergency, who in the hell wants to work on a weekend when you have a nice second home and a yacht to use.

Ironically when my last kid was born in the mid 80's, had full insurance, but if I didn't, would have only cost me around 500 bucks for a normal delivery that covered prenatal care, delivery. and three days in the hospital. Ha, my son called me about my new grand daughter and said he got the bill for three days, was only $3,000.00 that he has to pay 20% of, well not bad, only 600 bucks for a kid. Then he calls me back and says, that was just the bill for the baby. What the hell, I said, they just slapped her butt and gave her a couple of shots. My wife and I plus my DIL parents were there taking turns in the hospital helping them adjust to the new kid, nurses weren't doing much of anything besides coming in being a pain in the a$$, $3,000 bucks for what? He didn't get his wife's bill yet, takes them that long to add up all the costs. Probably will get a heart attack.

[HAL 9000 96]

HAL 9000 has enjoyed reading several of the viewpoints presented in this thread.

Kudos to the points brought forward by all.

[mRx 16]

1.) Both Canada (470:1) and Australia (400:1) have a higher patient / doctor ratio than the US (390:1) and yet don't spend anywhere near as much to get anywhere near as little in return.

2.) I don't think it's about more taxation but about moving medical care from the emergency room back to the doctors office. People need reasonable access to preventive and early care (relatively inexpensive) to avoid unneccesary and costly trips to the ER (which the insured and the taxpayer fund today). This would do wonders in terms of bringing cost down.

I read that the p/d ratio in the US was more like 1100:1, but regardless, you're correct, there are countries with considerably higher p/d ratios, yet have cheaper, more affordable healthcare. I do firmly believe that if the free market determined how many doctors we have, that would lift some of the burden off struggling doctors, but it wouldn't be the catalyst that wiped the artificial inflation off of our costs.

I totally agree with you that ER's should be for emergencies only. But that is impossible under our current regulated system. The ER's, urgent care centers, and triages around America are flooded with people who are sick, cut, and injured, and who probably wouldn't opt to go to the ER if an alternative were available. If a company were to arise that had 24-hour operations, and handled such non emergencies with a staff of LPNs and maybe a few pharmacists, then the ERs could be used for their intended function, life saving. Not every injury requires the opinion of a doctor, when a nurse can tell you the same thing. There is a direct demand for such a service, but the AMA will not have it. As I've said, they control the supply, they control the hospitals, they control who operates through manipulation of state licensure. It just couldn't be done with the existence of such an institution as the AMA.

But if the AMA was stripped of it's God-like powers to control the market, then that would be the domino that could knock the rest down, and such desperately needed alternatives could arise in the free market.

[DeadPoolX 9]

While I agree with much of Matt85's posts in this thread, I have to disagree with dismantling the AMA and FDA. Granted, both can be difficult at times and may even increase the overall cost. However, the AMA constitutes certain medical regulations, without which, anyone could conceivably hang a shingle outside their front door and claim to be a physician. Going to college and medical school would be irrelevant. What if someone attended both, but never graduated? They could say -- without lying -- that they went to both. No one ever thinks to ask, "Did you graduate?" How many people really look over a doctor's degrees hanging in his or her office? Not many, I'd gather.

The FDA also regulates drugs that are safe to dispense to the public. The FDA enforces testing. How many companies would bother doing that if it was not required? Probably not a lot as that, in of itself, costs money. Is the FDA always right? Of course not. I'd rather take my chances with them over hearsay, however.