Why is healthcare so expensive (Read 245 times)

I get that it is VERY difficult for the consumer to price shop actual cost for services in healthcare (and that the healthcare industry probably makes it this way intentionally) but as long as the consumer continues to consume and is not pushing the provider (for whatever reason) on cost, why would the provider ever bother to try to keep cost down?

 

Plus, you're just talking about figuring out the cost afterward.

 

Figuring it out ahead of time, with a hospital involved, is even more insanely tough. Radiology claims to know nothing about costs. Billing claims to know nothing about treatments (so they can't say anything about cost). And of course you have to be healthy and patient enough to go around fighting all the bureaucracy attempting to get any cost estimate, before you get treatment.

This is true even for completely routine services.  I’m at an age, and with a family history, where I get routine screening mammograms.  My insurance covers them at no cost to me, as routine preventive care, even though I otherwise have a high deductible plan.  The center my PCP directed me to is part of a hospital, and their Breast Health Center is ridiculously posh.  Seriously, the place is like a spa, complete with monogrammed terry robes, and there’s a children’s play area that I wish I could drop my kids off at any afternoon.  I’m guessing the clinic that’s used for routine diabetes care appointments is not so nice, but I don’t know.  Now, I could actually go to any place I wanted for a mammogram, and no doubt some of them charge a lot less.  I don’t need a terry robe and serenity fountain.  Of course, with no-copay coverage for it, I have zero incentive to price shop, but, say I wanted to, how do I even find an alternative?  It’s not an emergency service, I’ve got time, let me look around.  I checked my insurer’s website, but this information isn’t available.  The closest search was for “radiology and imaging,” and netted me 425 results, many of which probably don’t do mammography, and none of which list prices.  Even when I’m spending my insurer’s money, they don’t make it possible for me to try to spend less of it!  Say there was a “mammograms” section in the Yellow Pages, how do I find out which is more affordable?

Why is healthcare so expensive?

 

Lack of Single Payer.

 

As long as hospitals and specialists can dictate pricing due to the scarcity of competition, they will charge whatever the market will bear.  Consider M.D. Anderson, cited in that story, which is also #1 in US News Best Of: Cancer Hospital.  Cost is not a factor in that ranking.  They can charge cash-only patients virtually whatever they want, because they are viewed as the best, and most people will give up everything they have to have the best chance of survival.

 

The US has the highest spending on healthcare in the world in terms of %GDP.  The G7 median is 11%; we are at 18%; life expectancy is the same.  It's a broken system that demands some form of regulation, given that the market is neither competitive nor transparent.

I am in agreement, except the part about single payer.

Imagine regulations that required outcomes rankings....transparency on pricing for standard procedures...transparency would lead to competition.

To AnneCA's point, I have been in local hospitals frequently due to a number of deliveries and typical young child issues over the past 5 years.  It's clear that they have tried to use a level of excessive fanciness to draw people in (since people are not exposed to the cost this adds to their bills).  What has also been very clear is that these hospitals are operating way under capacity; without transparency and price competition, they charge huge rates to keep afloat even as most of their facilities are under-utilized.

You can have transparency and price competition without a single-payer system.

YMMV, but I don't trust the government to achieve efficiency in healthcare any more than they have proven to be efficient with anything else. But a few key regulations could fundamentally change the way the system operates.

As we lament how out system is more expensive than elsewhere, let's not forget that those systems that are single payer are not giving the best level of care to everyone.  In fact they are placing a finite cost on human life and making difficult tradeoff decisions to withhold care not deemed cost-effective; this is most noteworthy in the cancer field.  Those with means still go elsewhere (ie the US) to pay for the best care.  My wife cut her teeth in nursing at MD Anderson; our oldest daughter is named in honor of one of her patients, the wife of a foreign aristocrat, who sent her there for care when she was written off by their home single-payer system.  I'm aware of a case when the daughter of a high-ranking foreign politician sent their child to MD Andersen and required that they cover the name of the facility with a huge sheet as the helicopter flew in so the child could not read it and realize they were being treated for cancer.

IMO there are rational ways to bring some sanity to the system without a government takeover.

I always thought that it was the insurance companies that dictated what they will pay for a procedure with the the threat that they will take their business elsewhere.

The US seems to spend a lot of money on healhcare but those services are restricted to a limited population. I have lived in Canada and the US and my DH has practiced medicine in both countries. Canada does not really have a single payer system. Many people have extra insurance through work, Blue Cross... People are not denied treatment because it is cost effective, physicians are taught to look at the big picture. Does someone with a sore knee really need to have an MRI and see an orthapedic surgeon? Prbably not, but that is the first stop for many patients in the US, straight to a specialist. Why? They want the best, but the best costs money. In then US, patients are consumers, it is quite a different mentality in Canada.

Physicians are being forced to jump  through hoops in order to get compensation. Patient satisfacation is number one, they are compensated for keeping all thei patients happy, their physical health within certain quality metrics,  like diabetics, patients with hgh blood pressure. Of course,they want their patients to be healthy but they also lose money if this doesn't happen. That is happening in both Canada and the US. Pharmaceuticals are driving healthcare costs up.

It is complicated as is being an educated consumer. The human body is complicated and physicians are supposed to be the people to help you naviagate the system. They are the ones with the knowledge.  Consumer driven healthcare will not work. This isn't your car, this is your body.

http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/11/

Excellent article that has some answers to this question.  Long read,  but worth it.

Oops, didn't see the first post linked to this as well.  Anyway, something's gotta give.  The Affordable Care Act increases coverage, but won't reign in costs.  Not a formula for sustainability.

Why is Healthcare so Expensive?

---A whole list of reasons, but expect anything the government does (regardless of party) to make it only more complicated and expensive in the years to come......

One thing that a lot of people don't consider is how insanely expensive medical school is. I am a second year medical student and already am $210,000 in debt. I have 2 more years to go.

I don't know how y'all do it!  I have a friend who spent what seemed like 10 years in Med school and came out with massive debt.

She now owns her own practice, but when you consider the cost of running the entire business, plus assistants, plus the fact that a gajillion different insurance companies have to be billed for payments of the various patients, plus the fact that every single insurance company "approves" a different percentage of the bill you send them, it is chaos.

She works from early 'till late with patients, then works till real late trying to handle the business side of it, I really don't know how she does it.  ---- I am not in the field of medicine, but just thinking about it gives me a headache.