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Why Are US Health Costs So High? Follow the Bills
Looking at millions of individual bills that makeup the 2.7 trillion dollars of annual health care costs opens a gigantic window on the massive waste, redundancy, profiteering, fraud and sometimes criminal over-billing.
Here is a partial example of what I mean, in the words of Philip M. Boffey, the estimable science writer for the New York Times:
"Why does an appendectomy in Germany cost roughly a quarter what it costs in the United States? ($3,285 compared to $13,123). Or an MRI scan cost less than a third as much, on average, in Canada? ($304 compared to $1,009)."
"Americans continue to spend more on health care than patients anywhere else. In 2009, we spent $7,960 per person, twice as much as France, which is known for providing very good health services. And for all that spending, we get very mixed results--some superb, some average, some inferior--compared with other advanced nations."
Moreover, France and Germany, Italy, England, Canada, Belgium, Sweden and all other western countries plus Japan and Taiwan cover almost all their citizens, unlike the U.S. where 50,000,000 people are uninsured.
Boffey, who wrote a book on the National Academy of Sciences, (The Brain Bank of America: An Inquiry into the Politics of Science), under our sponsorship in 1975 goes on to cite the comparative price report of the International Federation of Health Plans in 2010. They are stunning! For Britain, Canada, France, Germany and the U.S. respectively, the average cost in dollars for bypass surgery is $13,998, $22,212, $16,325, $27,237 and in the U.S. $59,770. For cataract surgery the bill is $1,299, $927, $3,352, N.A. and in the U.S. $14,764.
Boffey adds other explanatory factors. These include higher administrative costs to deal with insurance paperwork, higher insurance company profits and executive compensation and less developed electronic health records leading to costly errors.
Except for Germany there are somewhat longer waiting times for some patients to see a specialist in these countries. But in the U.S. seeing specialists is often prohibitively expensive, and if you cannot afford such services, that is the longest waiting time of all.
A recent commentary in the Mayo Clinic Proceedings last August by Charles. W. Slack and Warner V. Slack, MD suggests another compelling comparison--between outcomes in different states in the U.S. They ask "why, for example, do Mississippi, Louisiana, and Georgia have such a high rate of mortality amenable to health care when compared with Idaho, Oregon and Washington." Wide differences between states and counties have been documented regarding the cost of identical operations, frequency of operations such as cesarean sections or hysterectomies and other surgical disparities studied under controlled variables.
Health care bills come with hefty levels of fraud. From the historic study twenty years ago by the then General Accounting Office of the Congress to the present estimates by the nation's leading expert in this field, Professor Malcolm Sparrow at Harvard University, fully ten percent of all health care expenditures are the result of computerized billing fraud and abuse. That will be $270 billion this year.
Dr. Sparrow, an applied mathematician, says it could be higher if the federal government would simply do a more detailed study. He adds that the enforcement budget should be one percent of the estimable volume of fraud. In actual practice, the enforcement budget is less than one/tenth of one percent, even though every dollar of enforcement brings in at least seventeen dollars back. (See Dr. Sparrow's website: http://www.hks.harvard.edu/fs/msparrow/)
Obviously the corporate fraud lobby is stronger than the taxpayer/consumer lobby in Washington, D.C. But why the health insurance companies, a formidable force in their own right when it comes to protecting its turf against single payer or full Medicare insurance (see singlepayeraction.org) do not do more to stop fraudulent billing practices, is a puzzle.
All in all, the health care industry is replete with rackets that neither honest practitioners or regulators find worrisome enough to effectively challenge. The perverse economic incentives in this industry range from third party payments to third party procedures. Add paid-off members of Congress who starve enforcement budgets and the enormous profits that come from that tired triad "waste, fraud and abuse" and you have a massive problem needing a massive solution.
So, voters, why not start challenging all candidates for elective office to make this vast daily heist a front burner campaign issue?
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85 Comments so far
Show AllI think this is a basic psychological problem. How do you get Americans, for whom a major component of their self-esteem is being American, to admit America isn't the greatest country on earth with the greatest healthcare (or any) system?
How do you get the class jock to admit he's not that good, when he's been told that his entire career AND has never been allowed to watch sports outside of his little hometown?
To add insult to injury, too many Americans who do recognize the problem are also all too willing to serially vote for the lesser of two evils, thereby assuring that "healthcare costs" keep rising.
Good points. I saw your earlier post on the socialist vote back in the 1930s and was surprised that nobody ever mentioned that fact. It's too bad that there are too many pushing for people not to vote. It's one thing to personally choose not to vote but to push people into giving up smacks of status quo pandering.
Like big time bank robber, United Health is there.
I'll add AETNA, CIGNA, and a few other big names to the list of robbers.
Come on -- Americans know we have crappy health care --
That's why 74%-76% of Americans want government-run health care.
Those who deny the reality of this disaster is our corporate-press and
our corporate-government -- and needless to say our corporate-medical
industry!!
More than 50 million Americans have no health care insurance --- no care at all.
Those of us who still qualify vto get health care -- either with insurance coverage/
Medicare -- or paying the bills ourselves -- also know that the care we get generallty
is uneven, if not often harmful!
That's true of every branch of medicine -- including dentistry!!
Sometimes we think it's just that we're unlucky -- sometimes we think it's the
town or state we live in. But the truth is, there is very littlle quality health care
in America any longer. And, most times, you'll be lucky if you aren't greatly
harmed by the "health care" you do get!!
Most of our GP medicine is based on pushing prescriptions for the drug companies --
overinflated claims and underreported side effects -- and ceiling busting prices on
these "new" drugs -- which constantly have ingredidents added and removed to
create "new" versions which won't be eligible to be coipied for generic prescriptions
at lower costs.
WAKE UP, AMERICA!!
Did I miss something? How come no one talks about the medical malpractice issue which has driven up costs considerably. Doctors have been practicing defensive medicine for many years now and have surely performed innumerable additional tests that oftentime are not needed but are done "just in case I get sued"!!
Thanks Ralph for the timely remainder which has been lacking since the healthcare year long debate and eventual half baked healthcare law.
President Obama and other were saying that healthcare costs was bankrupting our economy and adding to our deficit. Haven't heard much about the expensive nature of our waste,fraud and abuse system not even during the huge manufactured deficit debate.
We must be the dumbest people of all to be willing to pay more than anyone else for the same health services. I guess we are an exceptional nation after all.
thats why they dont give us the money in our salary
must go through insurance company so we have no control over it
Can you say SHELL GAME ?
"...pay more than anyone else..." That is why we cannot have universal health care until the system is changed at the root cause--the medical monopoly must be destroyed. Then there will be enough for everyone to have quality care.
Okay, a few important things.
While the assessment of Ralph Nader in this article is correct - - retired American journalist, Walter Cronkite, made the SAME OBSERVATIONS in a one-hour documentary he made in 1989 and which was broadcast in 1990. I had the good sense to set up my VCR and tape it off the air - - because the documentary was soon BURIED as deep as possible, by the cronies and colleagues of Wendell Potter. The documentary is called BORDERLINE MEDICINE. Each follower of Common Dreams really needs to locate and rent or buy a copy of this landmark documentary.
Ralph Nader does okay up to the point that he calls the health care systems of other nations Single Payer. Wrong wrong wrong wrong. They are Universal Health Care and the terms are not interchangeable. Single Payer is the term used by economists and masturbatory materialists. Their goal is to reduce cost of health care - as if that fixes everything. Universal health care is based upon a general social ethic of egalitarianism, and the belief that the reason for any society is mutual assistance, and for protection of the GENE POOL. The pool is best protected when as many as possible are in good health.
Check libraries for a copy of this book: =False Hopes - overcoming the obstacles to a sustainable, affordable medicine= by Danial Callahan. Or, as I did, purchase a copy and yellow hilight the parts which speak most to you.
Trylon
The documentary will probably be impossible to find.
Copy the Cronkite documentary onto a DVD, then put the DVD files (or convert them to another video format) up for .torrent file sharing. Use the left/anarchist site:
www.onebigtorrent.org .
http://pppdocs.com/borderlinemedicine.html
pjd412,
I checked out this site and thank you for recommending it. It's great!
Ralph, you forgot those gourmet priced meals they serve in hospitals. Mashed potatoes, something that looks like turkey, and canned peaches. Mmmmm......
You forgot jello.
As a medical biller of 20+ years it is clear to me that obfuscation is the name of the game. Every contract is negotiated separately, and has a different fee schedule, different rules and procedures. Some insurers require referrals, some authorization, etc. It is a rabbit warren of tricks and traps designed to make medical billing a nightmare. Claims disappear for no reason and trying to resolve a problem over the phone or by letter can be frustrating and ultimately disheartening.
At least single payer would mean playing by one set of rules,
"One set of rules" would create easy-to-follow audit trails that would cut into the $270 (plus) billion dollar annual medical fraud industry's revenue.
Excellent comments Ray and Jane.
"...opens a gigantic window on the massive waste, redundancy, profiteering, fraud and sometimes criminal over-billing"
Compare that to the standard establishment meme of medical costs being what they are due to those 'deadbeats who don't pay their med bills,' and of course, the long cherished 'phony malpractice suits' justifier.
This is one reason I have voted for NADER for more than 30 years - and will again in November.
I will too. I will not prostitute myself with any of their typical suspects.
Nader has my vote, too. I don't care if "Pavlov's dogs" think I'm wasting my vote.
In 1992 I wasted my vote on Bill Clinton who wasted no time zealously promoting and signing NAFTA into law.
Rather than wasting my vote on a Democrat or GOP candidate in the subsequent four presidential elections, I voted for Nader in all four and will vote for the most progressive candidate this Novemeber rather than wasting my vote on the lesser of two evils.
I think Jill Stein is a worthy successor and she will be on the ballot in the majority of states.
http://www.jillstein.org
PS - I liked your last piece in VtDigger ... :)
I understand anyone who can no longer bring him- or herself to vote for the lesser of evils between the two corporatist parties. In some circles, Democrats are now referred to as the *more effective* of evils. I just wanted to urge you, regardless of who you vote for, to fight for equal campaign financing and for a more representative, less gameable voting system (e.g., instant-runoff) at the same time. If those reforms succeed, your preferred candidates will be able to get their message out on an equal footing with the corporatists and you will be able to vote for them without worrying about throwing the election to the candidates you hate most. (Socially conscious Canadians, who split their vote between the New Democratic Party and the Liberal Party and seated an anti-environment, anti-Medicare Conservative government that 60% of the electorate voted against, can tell you how that feels.)
Why? Because in the US doctors and insurers are rewarded for higher profits, while in Europe doctors and the healthcare system are rewarded for better outcomes.
Bottom line, Because we live in a perverse society.
"Why does an appendectomy in Germany cost roughly a quarter what it costs in the United States? ($3,285 compared to $13,123). Or an MRI scan cost less than a third as much, on average, in Canada? ($304 compared to $1,009)."
.
.As a private citizen I have no control over what I will be charged or what I will be forced to pay. It's out of our hands. Health care providers and insurance companies rule.
Actually, you DO have control over what you will PAY. Insurance plans typically pay 25% of the "book rate" that hospitals show. That book rate is artificially pumped up to show insurers what a good deal they are getting while when someone coming in with no insurance is shown the same rate they think they have to pay it. In reality, if you have attachable assets, offer them 25% and don't settle for more than one third which is about all they would get if they have to send it to collection anyway. The 'book rate' for Medicare is somewhat higher, but it is all smoke and mirrors anyway...
One thing that is obvious is that all the other countries mentioned have Universal healthcare ( socialized medicine) , that is much cheaper and just has effective as the much more expensive private system in the US.
The private sector always tries and push the idea that what ever it is, they can do it cheaper and more efficiently then government can.
So, if that is true, why then when Obama proposed putting in a public option the private insures came out strongly against it, saying that they could not compete with a government plan and it would be unfair competition. I thought they could do it better and more efficiently and if that is true why do they seem to fear the competition from the government with healthcare?
After all wouldn’t people flock to the private insures with the better plan at a lower cost? Unless of course they can’t do it and know they can’t.. So, out the window goes their argument they can do everything cheaper and more efficiently.
They don't do healthcare very well at all!
The private sector might make widgets better and cheaper, but they need to leave peoples healthcare to the government.
Universal healthcare/socialized medicine is only cheaper because other countries set limits on what they will pay for and how much they will pay. In Germany, they use herbal medicines extensively.
In Germany they use natural medicine because it works, billions are not spent on big pharma, their doctors are not medicine salesmen, we pay three times as much for health care with half the results because the insurance, doctors, hospital administrators and big pharma are robbing us blind. Billions for insurance CEO's, hospital administrators and big pharma CEO's would be eliminated and are just a rip off to the citizens, thieving bastards making billions on illness not on healthcare. Our health for sale system is the only system that limits care.
Of course it works. They are not only robbing us blind, they are denying us natural medicine which can fix more problems in one day than they can fix in a month. But make no mistake, our gov't is a willing and avid participant in the fraud. Why anyone thinks single payer/universal health care can be implemented without serious systemic change is an eternal mystery to me. Otherwise, it just reinforces the monopoly.
Regulation is the reason healthcare in Germany is less expensive compared to the US. The Germans have a two-tiered system, a mix of private insurance companies and public providers. Depending on one's income, you go with one or the other. Costs are kept down through vigorous regulation. Here, regulation is called a 'job-killer'. Apparently, Germans don't suffer from that delusion.
Maybe we can have Medicare for All after the 1% crash our economy.
When the economy crashes, we are likely to have even less access to health care.
I would like to know what dialysis costs in Canada or France. My loved one goes three times a week and his insurance itemizes it at a whopping $60,000 a MONTH. Can you imagine how much this outfit makes with approximately 25 chairs and three shifts a day 7 days a week. This is insane.
Let's do the math
3 x4 = 12 visits per month
$60,000 / 12 = $5,000 per session (average 3 hours)
25 stations running 3 shifts per day = 75 shifts per day
30 days x 75 shifts = 2,250 shifts per month
2,250 x $5,000 = $ 11,250,000
That's over 11 MILLION A MONTH serving only 25 clients assuming they all average 12 visits.
There are no actual doctors on staff at this center. TOTAL ROBBERY. PLUS All Dialysis is subsidized by the government so it is pure profit for insurance providers. Check it out if you don't believe me.
Oh and the reason this person is on dialysis, he was given that bad dye at the imaging place. Yep. Makes you wonder huh. He won't sue because he is afraid his insurance will drop him now that he is totally dependent. Our health care system is a nightmare and when you realize how much money is being made for dialysis you have to wonder about this dye thing being intentional. I imagine people were never suppose to find out the cause. Conspiracy theory, maybe, but we all know too well what some people are willing to do for this kind of money. 11 Million a month for a mere 25 patients.
Okay. Remember that Canada, as a =federation=, does not have a national health care plan. It has a national MODEL of health care from which 10 provincial plans depart at their financial peril. One province might cover breast enlargement implants while another may not. Abortion is not one tricky issue, it is ten tricky issues.
Consequently, each province has an amount that will be paid for a dialysis treatment. There will a range, a mean, a median, and a mode. I have sent an inquiry to the Kidney Foundation of Canada, with HQ in Montreal, asking for data. If they are kind enough to reply, and the data is good for stats, I'll put the information in Common Dreams.
Trylon
Great. The question of people on serious medical protocols of this magnitude are rarely discussed and we never hear much at all about this enormously expensive situation.
I messed up my math at the end
The 11 million is right but it would be 187 clients per month.
Ralph Nader, you are amazing. You have been dealing with these type of issues for many many years, and you don't give up. I am blown away by your integrity and your commitment of The Seventeen Traditions.
You are a total inspiration to my 60 year old self, and I see you as an American hero.
I request all of you readers out there to get Ralph's book, "Getting Steamed to Overcome Corporatism". Take the pledge and contribute your time and $100.00 the Center for the Study for Responsive Law
We have to get busy and figure out how we can wake up enough members of the 99% to derail our corporate-run, crony, capitalistic government.
As for you nay saying nincompoops - either get on board or get out of the way. I have beautiful grand kids who need our help. So put up or shut up!
Any baby boomer occupiers out there? Ralph is our man for President, so get with it!
One Question (or more): How do you make the government do anything about the flagrant abuse of the Medicaid/Medicare system? For instance: A person has the right to go for an eye exam every two years and select frames that are "approved", for a small co-pay. The place of business then selects a frame that it charges a small fee to the 'customer', co-opts personal choice, and charges the insurer. This frame will easily break and be "un-repairable". Hence either the 'customer' and/or the insurance will need to pay for another frame before the 'customer' can have a new pair of glasses. The business will select a different frame for which new lenses will need to be processed and paid for. The doctor(s) have by then been paid and so has the person who processed the lenses the first time. If enough time passes then the doctor(s) will have to be seen again and paid again. The 'customer' complains in writing to the insurer and never recieves a reply. Calls and is told that is the businesses option. Much has been paid by Medicaid/Medicare and the 'customer' winds up with nothing as the insurer will only pay twice and is out whatever 'fees' have been paid. Even with the proof, no action will ever be taken. Who is more corrupt?
The Cancer industry will never be "fixed" and no cure will ever be found as long as it is this profitable. Everyone knows it . This is an example of why EVERYONE, rich and poor alike, should want to put a stop to this heinous for-profit system. It insures a system in which making people well cheaply is detrimental to the business and the gluttonous elite that control it. It is naive to think they would allow a cheap simple cure for cancer to be developed. If they found out that the cure for cancer was in a pineapple, you know damn well they would be putting millions into eradicating the gene in the pineapple and replacing that pineapple worldwide with a pineapple not containing this cure within it.. Do I believe that. Damn, well do.
For all Ralph Nader's words, the reasons for the high cost of health care in the US are simple and basic: "fee for service" and the abuses of big pharma (see: http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande).
The solution is simple and readily fundable with no new taxes if only we had a congress not wholly corrupt and not interested in the welfare of us all.
It doesn't take a minute to get this information on-line if anyone cared to compare costs per country. Like everything else, though, even if you know
this—have known this for years—our political system and the American
mentality that we have to do everything OUR WAY prevent us from streamlining our Health Care Programs.
"So, voters, why not start challenging all candidates for elective office to make this vast daily heist a front burner campaign issue?"
Yes sir, Nader. Right you are. We must all challenge our politicians on all levels and pay attention to all elections: local, state, and federal. We might get some real government provided health care for all instead of nothing until retirement and then pittance after that. Even soldiers aren't getting much out of the VA either.
Buy health insurance from the top one percent for enormous amounts of money or just die. PERIOD
Every time a Democratic president tries, and partly succeeds, in addressing health costs, he takes a shellacking in the polls. Apparently Americans want this shit.