When Does The Light Bulb Come On?

The New York Times has been running a series of articles on the cost of US health care.  This past Sunday they wrote about the cost of joint replacements comparing the cost of the same procedure in the US and in Belgium.  Unfortunately not enough people read the NYT because if they did a tidal wave of concerned citizens would be banging upon their Congress Member’s door demanding some explanation.

The headlines revealed Belgium costs of a hip replacement at about $13,000 (for everything, prothesis, doctor, and hospital).  The US weighed in at about $13,000 for the device alone and the total cost around $70,000.  Even more maddening was the news that there was about $150 of material cost in the device.  Profits and mark-ups made the difference to reach $13,000.  Hospital charges and doctor’s fees grew the total to the $70,000 range.

Hmmm.

The Congressional nonsense currently being perpetrated by the House GOP stands out starkly in the light of this article.  Obamacare is not the enemy.  Rather US healthcare profit have kidnapped the health care delivery system and is distorting both our moral and financial sense of balance.

The US spends per capita about $9,000 annually on health care.  A citizen, over a life time (say 80 years), consumes $729,000 at this average rate.  Compared to most other countries (with health care outcomes as good or better) the US consumes about twice as much.

But do you know anyone who thinks his healthcare costs that much?

The US system creates insurance pools which estimate health risk by a number of factors, such as age, gender, and pre-existing conditions.  To American sensibilities, why should I pay a lot if I’m healthy?

Add to this, for most Americans, insurance premiums are paid by their employer.  Many Americans pay nothing more.  It is true a growing number now are paying co-pays, deductibles, and a portion of the premium.  For the individual, however, its the whole premium (maybe with co-pays and deductibles) if this person can find a policy they can afford.

With the true cost of healthcare masked by employer contributions and by age, gender and health condition, Americans are clue-less about what their doctors, hospitals,and drug suppliers are really charging.

The NYT article bluntly said hospitals and doctors (and drug companies) charge what they charge because they can.

One might understand a 10-20% higher cost but 100+% (depending upon procedure), who’s the sucker?

Our Congress members continue to distract American’s attention claiming they can fix Obamacare (by repeal) and implying life will be great. Hospitals and doctors seem comfortable not calling attention to the unsustainable per capita cost difference with other countries (they will cite low Medicare reimbursements or all those uninsured Americans that show up at the Emergency Room as reasons why they must charge so much).  Never the less, there are plenty of studies which highlight 30% or more waste in the overall system

Reaching parity with other modern countries will be complicated and require changes in doctors salaries and hospital charges, as well as Americans undisciplined consumption.  Asking highly skilled individuals and medically advanced institutions to accept less will be very hard.  Asking Americans to personally do more to keep healthy and to consume less “unnecessary” medical services will just as hard.

Hmmm.

But as the NYT article hinted,  a business class ticket, a few great meals in Brussels, and a hip or knee replacement in Belgium will leave your wallet relatively full compared to a trip to a US hospital if you have to pay for it.

Hmmm.

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2 Comments on “When Does The Light Bulb Come On?”


  1. Thought-provoking post. One of my coworkers covered this issue: http://bit.ly/16vxzh2. What do you think of her write-up?


    • Helen, thank you for commenting…

      I am a knee replacement person and I could not think of a more quality of life enriching procedure than it… Mine was covered by corporate insurance + Medicare. My cost was in comparison small.

      The larger issue is that my knee replacement is not better than what could be found in several dozen modern countries… at far less cost. Your colleague’s article is informative (just as was the NYT article).

      My question is why aren’t more Americans waking up to the out of control costs?


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