It’s the Costs Stupid

There is something terribly wrong with our costs. Inefficiency in health care is bankrupting us. In the rest of the industrialized world costs are intermediate between those cited below and ours,  but still in the range of 50% less. Somehow our system of patents, income expectations, inefficiency at every level, unrealistic patient expectations and a system based on reimbursing costs, no matter outrageous, has had a terrible effect.

Medical tourism – surgery cost estimates

Procedure United States India Thailand Singapore Costa Rica
Coronary bypass $130,000 $6,650-$9,300 $11,000 $16,500 $24,000
Spinal fusion 62,000 4,500-8,500 7,000 10,000 25,000
Angioplasty 57,000 5,000-7,500 13,000 11,200 9,000
Hip replacement 43,000 5,800-7,100 12,000 9,200 12,000
Knee replacement 40,000 6,200-8,500 10,000 11,100 11,000

Source: Medical Tourism Association (2007).

None of our presidential candidates seems willing to address these underlying issues.

McCain’s “free market” solution is similar to Marie Antoinette’s let them eat cake. It provides tax rebates that don’t cover the cost of insurance and leaves all the inefficiencies, expectations and costs intact. His plan creates a system where it’s legal for insurers to raise rates and deny coverage to those who actually need health care. The insurer’s skim profits off of the healthy and then cost shift the burden to government when the person becomes sick. This is a money making scheme for the insurance industry not protection for consumers.

The health insurance fixes of Obama and Clinton are also inadequate but not quite as cynically structured. They simply don’t solve the problem by leaving the cost structure and expectations of both health suppliers and consumers intact.

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