Argument settled: U.S. healthcare costs out-of-control

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For most informed Americans, the argument over U.S. healthcare costs being out-of-control is really no argument at all. It’s an unsettling reality and a disturbing fact about our nation. It’s also a problem that becomes all-the-more perplexing when you compare our healthcare costs to the healthcare costs of other nations.

Jason Kane of the PBS Newshour reports that the United States spends $8,233 on healthcare costs per person annually.

“That figure is more than two-and-a-half times more than most developed nations in the world, including relatively rich European countries like France, Sweden, and the United Kingdom,” Kane writes. “On a more global scale, it means U.S. healthcare costs now eat up 17.6 percent of GDP.”

In case you’re keeping track, that’s 17 cents per U.S. dollar, and what do those 17 pennies buy us? As the Organization for Economic Co-Operation and Development (OECD) (“an international economic group comprised of 34 member nations”) found out, 17 cents doesn’t buy us much.

For one thing, the OECD average of physicians per person is 3.1, but in the U.S., it’s 2.4. The average OECD number for hospital beds per 1,000 people is 3.4. In the U.S., it’s 2.6.  And life expectancy in the U.S. is lower than 79.8, the OECD average, clocking in at 78.7 years. (In the U.S., life expectancy only added nine years from 1960 to 2010, but OECD countries added an average of 11 years, with Japan adding 15 years.)

When you hear politicians or talk show hosts ramble on and on about the U.S. health system being the greatest in the world, they might be right in terms of research and cancer treatment, but in terms of cost, they’re incredibly wrong and woefully uninformed.

Ideas about how to confront this cost issue are constantly being bandied about. There’s even one concept that’s based on Toyota’s car-manufacturing assembly line. There’s also the example set by other nations. As the OECD’s head of Division on Health Policy, Mark Pearson, told Newshour, “France and Japan demonstrate that it is possible to have cost-containment at the same time as paying physicians using similar tools to those used in the U.S.”

He cited three areas that these countries have mastered that have helped them keep healthcare costs down. First, a common fee schedule, “so that hospitals, doctors, and health services are paid similar rates for most of the patients they see,” thus reducing the temptation a provider may have to prioritize patients with better insurance policies above those who have lower-paying policies, like Medicaid.

Second, the governments of both countries don’t hesitate to lower fees if an area of healthcare is seeing skyrocketing costs, whereas changing U.S. rates is often difficult, because those rates are statutory or require Congressional approval in order to be changed. And finally, because of these two factors, private insurance companies in Japan and France can’t pass on higher costs to patients via higher premiums as they can in the United States.

The sense of nationalism and American exceptionalism that accompanies the U.S. healthcare debate is understandable, but for one segment of the ideological spectrum to continually blind their eyes to obvious facts will ultimately do more harm for the country in the long-run, especially in light of the short-term damage that has already been done by such stubborn and regressive thinking.

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Robert January 12, 2013 at 10:52 am

In fact are corporate and Insurance companies that control our life, impoverish our life, demise our future, confuse us, collect premiums but not cover services. You can be charged $99 just for gauze at ER instead of $3 retail price. And if they do not send you in a hospital for a surgery, and better die over there, are you who is going to pay cash out-Of-Pocket for the expenses but not Insurance Corporate.
Humana based in Louisville, KY. They have 11.5 million medical members and over 25,400 employees. Their revenues exceed 25.3 billion dollars in expense of vulnerable American taxpayers. Humana generated $36.8 billion in revenue for 2011, up 9.6% from $33.5 billion in 2010, and has a market capitalization of more than $14 billion.
Then there is the ‘granddaddy’ of the private health insurance industry’s impact of physician private practices – a system of codification and nomenclature required when submitting claims that leave doctors having to employ far too many people to manage the insurance billing system and punishes doctors for dealing with a variety of patient problems in one visit. Indeed, a physician who refuses to discuss or treat two different patient complaints in one visit, thereby requiring the patient to return for another session to discuss the problems separately, will likely be paid twice as much by the patient because the insurance company refuses to pay.


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