When people say that they’re fed up with health care, what they really mean is that they’re fed up with health care billing.
A survey from the International Federation of Health Plans explains why. The organization provides a snapshot of medical costs in countries around the world. The results confirm what most of us already know.
The U.S. health care system is the most expensive in the world.
In the United States, a typical angioplasty procedure to open a blocked blood vessel costs $32,000, compared to $7,400 in Switzerland and $6,400 in the Netherlands. An MRI averages $1,420 in the United States and $450 in Britain. An important breast cancer treatment averages $211 in the United States and $44 in South Africa.
These are just a few examples showing that high costs are as big of a problem as access when it comes to reforming U.S. health care. Policymakers have a difficult needle to thread because efforts to reduce costs by government fiat could lead to hospital closures or some form of rationing if reimbursement doesn’t cover the actual cost of service.
But failure to do anything about costs that exceed inflation means that individuals and employers devote a growing percentage of income to health care. Just this week, the Buchanan County Commission approved a budget that contains a $480,000 increase in health insurance costs. It is not a problem limited to Buchanan County or any one provider.
U.S. health care spending increased 4.6%, to $3.6 trillion, in 2018, according to government figures. It accounts for more than 17% of the economy. The numbers are even more striking when broken down further, with the U.S. Bureau of Labor Statistics finding that the consumer price index for health insurance spiked 12% last year while the same price index for medical care services rose only 2.3%.
This is the environment that feeds a multitude of proposals, including a complete government takeover of health care. Other proposed solutions are more targeted, including one that seeks to create greater transparency on the negotiated prices between hospitals and insurers on the theory that hospitals would be pressured to restrain prices if consumers had more information at their disposal.
Beware of anyone who offers an easy prescription to a complex, enduring problem. But one issue is clear. All those involved in the health care food chain, from providers and hospitals to private insurers, will have to address rising costs as a core issue in order to avoid a more painful, government-imposed remedy in the future.
In our view, greater price transparency is a less bitter pill to swallow.