How Much More Does Health Care Cost in the United States Than the Rest of the World?

This Much More

The U. S. health care system is broken.  It is does not have a long term life.  It will either change or it will cease to deliver basic health care to the majority of the population.  Not convinced, consider this chart.

NETHERLANDS

NEW ZEALAND

SPAIN

SWITZERLAND

CANADA

$319

$6

$7,731

$655

$35

AVG. U.S. PRICE

AVG. U.S. PRICE

AVG. U.S. PRICE

AVG. U.S. PRICE

AVG. U.S. PRICE

$1,121

$124

$40,364

$1,185

$914

M.R.I. scan

Lipitor

Hip replacement

Colonoscopy

Angiogram

Source: 2012 Comparative Price Report by the International Federation of Health Plans. The average prices shown for colonoscopies do not include added fees for sedation by an anesthesiologist, a practice common in the United States, but unusual in the rest of the world. The additional charges can increase the cost significantly.

The complex reasons behind this can be reduced to two major points.

1. The rest of the world has government provided health care and the rest of the world has government controlled health care costs.  
2. The United States has a Pay-for-Procedure system, in which the only way that health care providers make money is to provide treatment.  There is no financial incentive for providers to promote good health, only to promote expensive treatment.

So why does government involvement work in other countries?  Because health care is a monopoly, and a monopoly of a vital service.  Unlike buying an automobile or purchasing a meal at a restaurant, consumers do not have a choice about health care.  When you are sick you buy health care.  Period.  So the expectation is that health care would experience monopoly pricing tendencies, and it does.  Really, this is basic Econ 101.

The second issue is really the heart of the problem.  Health care providers do not make money by preventing injury and disease, they make money by diagnosing and treating injury and disease. 

This system is changing, because it has to.  The U. S. economy will not sustain rising health care costs, which already take more of national income than any other country.  The problem though, is that without effective management health care is evolving in a slow and inefficient manner.  The health care reform act, for all its good points, did nothing to fix the basic problem.  If Republicans could focus on that aspect, instead of their vitriolic hatred of all things Obama they would benefit the nation and themselves.

But they won’t, will they.  To paraphrase a recent book title, for Republicans it feels too good to hate this much.