published Sunday, March 31st, 2013

Health care costs spiral sets u.s. apart in the world

Higher cost projections by BlueCross BlueShield last week for health care insurance after the Affordable Care Act is implemented next January were quickly followed by Gov. Bill Haslam's lamentable decision to reject a federally funded expansion of Medicaid/TennCare for an estimated 180,000 lower-income workers in Tennessee for the next three years. But while cost factors in both cases reflected current U.S. health-care cost trends, neither event gave significant attention to the root cause of this nation's excessive health-care costs relative to the stunningly lower cost of excellent universal care in all other rich industrial nations.

The staggering difference merits serious scrutiny.

Many other rich countries run single-payer, non-profit health insurance programs (think, Medicare for all) financed under an income tax. Several, like Germany, allow or require higher-income citizens to buy private insurance. Regardless of their insurance mix, most other rich countries spend about half of what the United States spends for health care as a percentage of their Gross Domestic Product.

In 2010, the last year for data points on GDP spending, the United States spent 17.8 percent of GDP on health care. By contrast, Australia spent 9.1 percent; Spain and the United Kingdom, 9.6 percent; New Zealand, 10.1 percent; Canada and Switzerland, 11.4 percent; France, 11.6 percent. The average health-care spending was 9.5 percent in the 34 member countries (including the U.S.) of the Organization of Economic Cooperation and Development.

Perhaps more significant is that health-care indices in the United States generally trail the OECD's healthiest countries in such factors as longevity, wellness, infant mortality, obesity and chronic diseases. Which raises an obvious question: If the United States' spending on health care, now more than 18 percent and almost double those of other OECD countries, cannot be justified by common measures of good health, why is it doubly costly?

As anyone who has visited friends and hospital patients in today's modern, high-tech international competitors -- or consumed their prescriptions drugs or been scanned by their exported imaging equipment -- the cost difference is not attributable to lack of the most modern care standards and health-care equipment. Patients in most other rich nations, moreover, have more doctors per 1,000 population and are typically allowed longer hospital stays.

In fact, the difference in health-care costs and spending in the U.S. versus other rich nations results mainly, and simply, from far higher charges by providers and hospitals than most in other rich nations, according to data reported by the International Federation of Health Plans.

The average 2012 cost per hospital day, for example, was $476 in Spain, $731 in the Netherlands, $853 in France, $964 in Chile, $979 in New Zealand and $1,472 in Australia. But the average cost in the United States was a whopping $4,287.

Scanning and MRI imaging typically costs is in the $300 range in Netherlands, the U.K. and France, but jumps to an average of $1,121 in the U.S. A hip prothesis costs five times more in the U.S. than in Spain. Costs of prescription drugs in the United States are similarly a sharp multiple of costs abroad, primarily because Republicans forbid Medicare, which pays for 60 percent of prescription drugs in the U.S., from bargaining with pharmaceutical companies on prescription drug prices.

Routine office visits to doctors, surgical procedures like angioplasty, and major surgeries -- i.e., bypasses and hip and knee replacements -- are similarly disproportionately costly in the United States versus other rich countries. Total hospital and physician costs for an angioplasty in rich, medically modern Switzerland, Netherlands, France and Australia are from about $5,300 to $7,600, but it cost an average of $28,182 in the U.S.

The cost for heart bypass surgery runs a similar course -- from roughly $14,000 to $23,000 in five of the top European countries, to an average of $73,420 in the U.S.

The cost difference can't be explained by technology, availability of care, quality of doctors and hospitals, costs shifting for care of the uninsured or medical outcomes. Providers simply charge more, and Americans simply pay more of their dollars for health care. Health-care experts here would argue that our fee-for-service system and provider competition incentivizes and spurs higher costs. But there's something else at work: unreasonably higher charges all around. Yet our leaders aren't talking about that.

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AndrewLohr said...

How cut costs without death panels? Free up consumers to choose less costly options, and free up providers to offer whatever they think there's demand for.

How absurd to make Mother Theresa buy condoms for Hugh Heffner, so to speak. Let him pay for his own hobbies.

March 31, 2013 at 1 a.m.
nucanuck said...

If single payer systems provide better results and cost far less, then why do so many Americans go apoplectic at the very mention of...s-i-n-g-l-e p-a-y-e-r???

It has to be that the propaganda aparatus of the medical community has convinced enough people that the current US system is somehow superior when clearly it is not.

Medical costs are one of the big reasons why the US is less competitive than other countries.

March 31, 2013 at 1:47 a.m.
anticorp said...

nucanuck, I prefer to call a spade a spade. No, I'm endeavoring to over come my racist upbringing, so don’t go there. I am talking about medical industry profits are the reason costs keep going up.

Making every effort to remove the profiteers from health care is the path to righteousness. No, I'm not going all preachie, I'm just trying to relate.

“We have the best health care system in the world” (if you must appeal to willing dupes) but it is as you say a "Single Payer System" in the Veterans Health Association." It is having some access issues right now, but the outcomes are better than John's Hopkins, Mayo Clinic and Mass. General, with half the cost of the rest of health care in this country.

By cutting out the profiteers (did Jesus charge for healing - just relating) Medicare saves about 15% over insurance companies, with better outcomes and the VA is 35% less costly than Medicare, and you guessed it, with better outcomes. http://minnesota.publicradio.org/display/web/2009/08/17/va-clinic-care Once Veterans get past the part of VA health care that is still like private care (access) they agree it is the best health care anywhere and the outcomes prove it.

March 31, 2013 at 8:43 a.m.
EaTn said...

Our health-care system has been a blank-check and deep-rooted for so long that all have forgotten that solutions are out there. For starters we could find out what the best value countries in the world do, then copy the best practices of each one. But then that would require co-operative efforts from our politicians, health care providers, insurance companies and citizens.

April 1, 2013 at 5:34 a.m.
328Kwebsite said...

Failure to capitalize "U.S." in the headline of this editorial. Edit the paper.

April 1, 2013 at 6:35 a.m.
Leaf said...

I also assume that the CEO of Blue Cross is simply lying about that sudden 30% jump. They are in business to make money, and that is what they are trying to do - justify raising their prices and profit, and criticize those who would try to reign in their profiteering.

One does not become the head of a large insurance company by being honest.

April 1, 2013 at 10:06 a.m.
Rickaroo said...

"For starters we could find out what the best value countries in the world do, then copy the best practices of each one. But then that would require co-operative efforts from our politicians, health care providers, insurance companies and citizens." - EaTN

Exactly right, EaTn. And it would also require that America step down off of its high horse and let go of its egotistical notion that we are "exceptional," blessed by God, and somehow better than every other nation. The notion of American exceptionalism has been taken to such extremes that our arrogance and stubbornness are killing us. Actually we have a lot to learn from many other nations who are doing some things far better than we are, but so many Americans think that it's a sign of weakness not to show off our brute force at all times, like a bull in a china shop, and do everything the "American way." Better to be uniquely American and wrong, they think, than to believe any other country has anything to teach us. This nation was/is truly blessed with an abundance of natural resources that could have made it great for a long time to come, but we have perverted those blessings in a way that has caused us to become great for all the wrong reasons. We have focused so much on enriching the few at the expense of the many that whatever blessings we had, they are now destroying us from within, like a cancer.

April 1, 2013 at 11:53 a.m.
conservative said...

nucanuck.

If,if,if,if,if,if,if.

April 1, 2013 at 1:12 p.m.
anticorp said...

I see the local Tennessean Conservatives are just like the ones elsewhere.

They cut right to hyperbole and gutter sniping, as opposed to debating and sparring with facts. There is a clue in there somewhere.

April 1, 2013 at 1:59 p.m.
nucanuck said...

JonRoss, you are flat out wrong! If the Progressives had had their way with health care, we would now have an efficient single-payer system. Instead we have this cobbled together appeasement for the insurance companies and big Pharma as a result of trying to work with the GOP members of Congress. You not only share the blame, you get most of it!

April 1, 2013 at 3:57 p.m.
Rickaroo said...

"anticorp obamacare was jammed down our throats and up our arses with no debate and no accommodations to people who objected or wanted something slightly different. Debating and sparring is not in the Democrat/Progressive/Obastard dictionary." - JR

Yes, and FDR "jammed" his policies down the throats of recalcitrant conservatives too. He said that he welcomed the enmity of his detractors. Would that Obama acted more like FDR and less like some wimpy centrist. If he would stop trying to appease the Republicans and you teabagging conservatives and be the bold progressive that we libs THOUGHT we were electing we could be on the road to recovery and prosperity instead of stuck in this meaningless tug-of-war with you regressives who are bent on taking us back into the Dark Ages. The longer we waste time debating with you clueless righties and libertarians who have no vision or plan or grasp of reality the deeper we sink into the abyss.

April 1, 2013 at 4:32 p.m.
NirvanaFallacy said...

How about wait times in these other countries? Or what about cancer survival rates? Why do so many people come to America to get health treatments if our system is so bad? Comparing what other countries spend doesn't paint the whole picture.

Furthermore, why must the solution be a single payer system. Are the only choices keeping the status quo or going to single payer system?

The liberal experiment has failed. We have been borrowed huge amounts of money, expanded the size of the government workforce, and kept interest rates at zero and we have got nothing to show for it. Maybe we need to try something else like cutting government, stop raising taxes, simplifying regulations and getting rid of Obamacare.

April 1, 2013 at 4:49 p.m.
anticorp said...

JonRoss, The ACA was a compromise (sadly) to the GOP. Richard Nixon first introduced it. The Heritage Foundation promoted it. Romney successfully installed and our president ran for office on change.

The system before ACA was giving us double digit premium increases. They are already down below 5%. It could be much better if the 21st Century Conservatives would swallow their hate for the supposed Godless Infidels long enough to see the forest.

There is a little discussed bit of knowledge about politics. The opposition passes your most difficult legislation.

Want your power back? Lead on Single Payer health care. Aren't you proud of how you treat our Vets? They get the "Best Health Care Everywhere." Google it...

Steal it from us Libs. Payback is a b!^@#... I use to vote Republican often when they were for more than Corporations.

April 1, 2013 at 5:05 p.m.
Rickaroo said...

"The liberal experiment has failed." - NF

What a crock of BS. For the last 30+ years, ever since Reagan sat on his golden throne, the conservatives have seen to it that the money has been funneled upward instead of distributed in a more equitable way that would enable more people to enjoy a higher standard of living. Their self-serving philosophy of "starving the beast" has paid off for them and weakened many of the progressive policies and programs, and now they try to make the claim that those policies failed simply because liberalism itself is a failure. NF, you either know the lie but spread it anyway, or you are simply too stupid and gullible to think for yourself and you swallow the spoon-fed bile being fed to you by Faux News and loony Limbaugh and the other wing-nut air-heads on the air waves.

April 1, 2013 at 5:20 p.m.
rick1 said...

rickaroo said the conservatives have seen to it that the money has been funneled upward instead of distributed in a more equitable way that would enable more people to enjoy a higher standard of living.

This report from the Treasury Department says differently.

http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf

April 1, 2013 at 6:10 p.m.
Rickaroo said...

Rick1, you must take Thomas Sowell seriously. He often refers to income mobility charts to make his flimsy case against minimum wage and the reality of poverty and income disparity. He's a dimwit.

Anyway, it's funny that you should pick the period when Clinton was in office, when he raised taxes and turned a deficit into a surplus. Bush inherited that surplus and the nation still enjoyed some lingering prosperity, but then wages stagnated and finally the sh#t hit the fan in 2008. I am not denying that there have been brief periods of prosperity in the past 30 or more years, regardless of whether a Dem or a Repub was in the White House. But "income mobility" charts are a skewed and convoluted way of gauging the health of the economy. It's easy to play fast and loose with the figures to get whatever result you want from them. Income disparity is a much better indicator of how overall wealth is distributed and how healthy or unhealthy the economy is. If the minimum wage were what it should be, relative to the cost of living, a working person would be making at least $10/hr. today. Just imagine how much the welfare and food stamp rolls would be reduced if people were making a decent living wage. If wages had kept pace with what the typical CEO makes, he/she would be making at least $25-$30/hr. Now, I'm not saying that a burger flipper deserves to make $25/hr. But then, nor is any CEO deserving of making over 300 times what the average worker makes. I don't think that CEOs today are any smarter or work any harder than CEOs of 30 years ago, when they made approximately 24 times what the average worker made.

You can tout your income mobility chart all you want to, but when a person with a full-time job can't afford health insurance because it costs more than the mortgage on his house, or a young person can't go to college without incurring tens of thousands of dollars of debt,or a person who has worked at Walmart or Target for 5 years still has to get food stamps or Medicaid because they're only being paid $8/hr., then there is something really screwed up about our country and our economy.

April 1, 2013 at 7:04 p.m.
rick1 said...

rickaroo, the report covered Clintons last term and Bush first term. Clinton did raise taxes but that was in 1993 and the economy did not respond favorably at all. It wasn’t until 1997 when the Republican Congress a tax bill that balanced the budget and cut capital gains taxes from 28% to 20% and established higher limits on tax exclusion for IRAs and estates.

Since you seem to have a problem with the salaries CEO’s make do you also have a problem with the money pro athletes and Hollywood stars make?

How much should a CEO make?

If you offered a job that paid that type of money would you turn it down?

I noticed you mention the numbers are skewed but you offered nothing to support this so you bring a black man conservative into the conversation by mentioning Thomas Sowell, which shouldn’t surprise me since you have made it perfectly clear how you feel about black conservatives. Keep playing the race card when you are losing the argument.

April 1, 2013 at 8:20 p.m.
Easy123 said...

rick1,

"I noticed you mention the numbers are skewed but you offered nothing to support this so you bring a black man conservative into the conversation by mentioning Thomas Sowell, which shouldn’t surprise me since you have made it perfectly clear how you feel about black conservatives. Keep playing the race card when you are losing the argument."

Strawman. Ad hominem. YOU are losing the argument, rick1.

April 1, 2013 at 8:43 p.m.
anticorp said...

Excellent rendering of the facts Rickaroo. Clearly rick1 copies and pastes Conservative think tank spin giving them little or no thought.

Furthermore as it did to you, it immediately leapt off the page at me the first half of the period was Clinton and Gore righting the ship and the last delivered the results. The reverse of course was at the hand of George Bush and Dick Cheney.

April 1, 2013 at 8:52 p.m.
rick1 said...

anicorp, The facts are the Republican Congress presented a tax bill that balanced the budget along with tax cuts in 1997 which Clinton signed. The facts are the last half of the 1990's the economy took off after the tax cuts were signed into law. The facts are the economy sucked after Clinton rose taxes in 1993. These are not talking points, they are facts but they do not fit your agenda just like they do not fit rickaroo.

April 1, 2013 at 10:19 p.m.
Easy123 said...

rick1,

"The facts are the Republican Congress presented a tax bill that balanced the budget along with tax cuts in 1997 which Clinton signed."

The Omnibus Budget Reconciliation Act of 1993 was proposed by the Democrats. That bill raised billions in extra revenue by cutting taxes on lower income people and raising taxes on the upper 1%. It also required that we maintain a balanced budget. That act, along with reduction in spending, raised more revenue and reduced the debt.

"The facts are the last half of the 1990's the economy took off after the tax cuts were signed into law."

Only after taxes were increased to raise revenue in 1993. You keep neglecting the importance of raising the $400+ billion in revenue.

"The facts are the economy sucked after Clinton rose taxes in 1993."

False. National debt, unemployment, and the poverty rate went down. Median family income increased every year after 1993. Interest rates even went down after 1993 because the economy was, in fact, improving.

"These are not talking points, they are facts but they do not fit your agenda just like they do not fit rickaroo."

They are talking points. I have no doubt that you got them from some sort of WingNut propaganda source. You only present the facts as you want to see them. You only see the WingNut side of the coin. Tax increases work, especially when you couple it with spending cuts. They worked in 1993. The economy improved because of the tax increase in 1993. You would rather mistakenly give all the credit to the Republican Congress in 1997 when, in fact, had it not been for the Budget Reconciliation Act of 1993 proposed by the Democrats, the Balanced Budget Act and Taxpayer Relief Act of 1997 would never have happened.

Welcome to the real world, rick1. Where WingNut facts are not facts at all.

April 2, 2013 at 12:42 a.m.
nucanuck said...

rick1,

If you want to hang something on Clinton it should be his embrace of the repeal of critically important bank regulations. That one act has put the country and the developed world into a sea of economic dispair where the bankers control everything and are sucking our country dry. Until that is reversed, we will continue downward. Count on it.

April 2, 2013 at 2:22 a.m.
anticorp said...

nucanuck said

"If you want to hang something on Clinton it should be his embrace of the repeal of critically important bank regulations."

The Gramm, Leach, Bliley Act was signed by Clinton. It was a Republican bill and it was veto proof legislation.

He could have just not signed it though. I think that was about the time of his impeachment for lying to hide adultery. I could speculate he was up against the wall and feeling the better course at the time was to be compliant with his tormentors.

I won't though. He could have stuck to name rank and serial number.

April 2, 2013 at 10:12 a.m.
Rickaroo said...

Good points from both of you, nucanuck and anticorp. Whatever Clinton's true motive at the time there's no doubt that he is as culpable as anyone for contributing to the housing bubble and financial bust, on account of his evisceration of Glass-Steagall. He's also guilty of not listening to Brooksley Born, the chairperson of the Commodity Futures Trading Commission during his time in office. She was the lone voice crying in the wilderness that the derivatives market was a house of cards and on the verge of collapse. He ignored her entirely and chose to listen instead to his economics "experts" Greenspan, Rubin, and Summers, who were themselves making money in the derivatives market and saying in unison how it would be best not to try to reign it in but leave it alone, that it would self-regulate. They were almost to the point of mocking Born outright.

Clinton did some good things (creating a surplus out of a deficit is itself worthy of a gold star, for sure) but he leaned a little too far right, IMO, and embraced too much of Reagan's anti-government philosophy.

April 2, 2013 at 12:19 p.m.
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