Monday, March 18, 2013


Ezra Klein writes:
There is a simple reason health care in the United States costs more than it does anywhere else: The prices are higher.  That may sound obvious. But it is, in fact, key to understanding one of the most pressing problems facing our economy. In 2009, Americans spent $7,960 per person on health care. Our neighbors in Canada spent $4,808. The Germans spent $4,218. The French, $3,978. If we had the per-person costs of any of those countries, America’s deficits would vanish........We spend less time in the hospital than Germans and see the doctor less often than the Canadians.  “The United States spends more on health care than any of the other OECD countries spend, without providing more services than the other countries do,” they concluded. “This suggests that the difference in spending is mostly attributable to higher prices of goods and services.”
But.... but.....I thought the problem in this country was that the ranks of doctors were filled with profit motivated dickheads like those in McAllen, Texas?  I thought the sole problem was our fee-for-service reimbursement system that rewarded more and more interventions and allowed doctors to game the system in order to enrich their coffers?  I thought the solution was to convert all doctors into salaried employees, to completely disincentivize them from any profit-maximizing motivations and allow the Good, Noble giant healthcare conglomerates like Mayo or the Cleveland Clinic be in charge of carefully doling out just the appropriate amount of healthcare services this country needs? 

Klein goes on:

The result is that, unlike in other countries, sellers of health-care services in America have considerable power to set prices, and so they set them quite high. Two of the five most profitable industries in the United States — the pharmaceuticals industry and the medical device industry — sell health care. With margins of almost 20 percent, they beat out even the financial sector for sheer profitability.
Again, this does not jive with the agitprop we were fed during the Obamacare debate and subsequent passage.  We were very clearly told, IN NO UNCERTAIN TERMS, that the problem with American healthcare was surgeons who would rather cut off somebody's leg to make 30 grand than take the time to provide less lucrative preventative services.   Evil Surgeons!  Doctors bad!  McAllen, Texas!  Gawande has hit the nail on the head!

The reality is far from the fantasyland that people like Atul Gawande and Barack Obama and Andrew Sullivan and Matthew Yglesias would have you believe.  Physicians are an easy target because we are a motley, disorganized assortment of self-interested factions.  Much easier to demonize an entire profession than get into the weeds on issues like opaque, arbitrary hospital chargemaster pricing or medical device profit margins or hospital CEO salaries or the fact than bullshit laws prevent Medicare from negotiating reasonable reimbursement schedules with the pharmaceutical industry.   

1 comment:

Anonymous said...

Good stuff.