America’s Health Care Prices Are Freakishly, Unjustifiably High

Medicare and Medicaid are not unaffordable. It’s the stuff they pay for that’s unaffordable.

Via Ezra Klein, International Federal of Health Plans has the charts to prove it:

There’s no mystery here. The prices are just too high. Nobody’s figured out a way that we can pay as little as other rich countries do besides price controls. They simply make it illegal to charge such high prices, and voila! the prices are lower. Maryland does something similar to this, and Pennsylvania should do it too. The pushback you’ll hear is that price controls will reduce investment in the health care sector, but that’s true of any solution that “bends the curve” as they say. The fact is that we have nothing to show for paying these higher prices in terms of better health outcomes. We can pay as little as every other rich country and be just as healthy.

Comments

  1. GDub says:

    I never find these bulk numbers persuasive. A policy discussion needs to real this down a bit more. What’s the role of overhead, or drug research costs? This approach does not account for a likely free rider issue on med technologies and I highly doubt it is an accurate comparison of health care systems.

  2. Jon Geeting says:

    He’s got 21 charts showing the same thing, procedure after procedure! The fact that you are still casting about for some alternate explanation at this point says more about your ideology than your read of the evidence.

  3. Mitchell says:

    You will never bring health care costs down without a serious look at tort reform. The primary reason there is test after test after test is to prevent the potential for the multi million dollar lawsuit being filed. You take that out of the equation and you take out the cover your ass tests doctors prescribe and lower overall costs. This is very low hanging fruit and will provide a more immediate cost reduction than caps.

    However, both the repub and dems seem to have no stomach for taking on the legal profession

    • Jon Geeting says:

      I’m all for trying out all the tort reform pilot projects in Obamacare. But that’s just not a significant portion of US healthcare costs. Total medical liability spending (including defensive medicine, including all legitimate malpractice lawsuits and awards) accounts for about 2% of US health care spending. It’s about $55 billion. Which is nothing to scoff at, but again, 2% of our health care spending hardly dents the problem, which is out of control prices.

    • Jon Geeting says:

      From Health Affairs:
      Concerns about reducing the rate of growth of health expenditures have reignited interest in medical liability reforms and their potential to save money by reducing the practice of defensive medicine. It is not easy to estimate the costs of the medical liability system, however. This article identifies the various components of liability system costs, generates national estimates for each component, and discusses the level of evidence available to support the estimates. Overall annual medical liability system costs, including defensive medicine, are estimated to be $55.6 billion in 2008 dollars, or 2.4 percent of total health care spending.
      In other words, even if you got rid of the entire medical liability system – including the legitimate malpractice lawsuits, which are the overwhelming majority – you’d only reduce US health care spending by 2.4%.

  4. John says:

    The Democrat Party’s estimate on tort reform savings is $55 billion/year. Since they’re the ones blocking tort reform, that means the real number is most likely multiples of that figure.

    But let’s ignore that and stay with their number. It says alot about the radical far left and the Democrat Party that $55 billion / year (enough to pay for 1/2 of their estimate of Obamacare by the way) is too small to look pay any attention to. More important that they continue to whore themselves out to the the tort lobby than do what’s right for the American people.

    Real simple.

    • Jon Geeting says:

      No, the entire medical liability system is $55 billion a year. Most of that is completely legitimate, not fraud.

      • John says:

        Never said it was fraud. I”m talking costs of defensive medicine, needless spending on attorneys for specious claims, cost of liability insurance coverage, etc.

        Your party’s estimate of the savings is $50 billion / year. You put your whorish need for campaign contributions ahead of the American taxpayer saving $50 billion / year.

        Yes it’s a small number in the overall healthcare picture. But it’s a fucking big number in its own right!

        Imagine how you you feel when you talk about closing corporate loopholes and generating $50 billion/year in tax revenue. This is no different.

        How about the Democrat Party do what’s right?

        • Jon Geeting says:

          Again, $50 billion is the cost of the entire liability system. The entire liability system is not fraud, or even mostly fraud. It’s legitimate expenditures. That’s not where most of the waste is in the health care system. I hope the pilot programs turn up cost savings, I really do. I have no personal or political affinity for the trial lawyer lobby. But it’s a very strange place to focus in looking for health care waste, and I think it says a lot about your unfamiliarity with health care economics and political economy.

    • Jon Geeting says:

      And this shows what a hack you are. There are tort reforms in Obamacare, for the hundredth time. There aren’t caps on damages, which is what you want, so you don’t want to acknowledge this. But there are various pilot programs for policies like giving doctors legal immunity if they can show they followed a checklist of best practices. And before you disparage the idea of pilot programs, keep in mind that we have no idea what works to control costs. Virtually all of the health policy ideas for cost control are in the ACA as pilot programs, and they’ll be tested out in the states and cities, and when we see what works, we can scale up the best ideas. Chanting tort reform over and over is not a policy agenda, it’s a cop out. You really need to look beyond the 2% of health care spending you are bizarrely fixated on.

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