Live data from Hacker News

Why an MRI costs $1,080 in America and $280 in France

washingtonpost.com

121–130 of 223 posts

Re: Why an MRI costs $1,080 in America and $280 in France

#121
post #91

Want to get our costs down to competitive levels? 85% of all healthcare costs in America are for those over the age of 65. America has the leading health care system for the elderly. We pay for 80 year olds to have surgeries that they can't get in Canada or France. Nobody wants to talk about it though, because it's not a nice thing to say, that grandma is buying six extra months at a price of a million in treatment.…

This PDF shows the 65+ demographic as accounting for 35.6% of health expenditures in 2004:

https://www.cms.gov/NationalHealthExpendData/downloads/2004-...

It seems highly unlikely that it would change so drastically in just 8 years. Where does your 85% figure come from?

Re: Why an MRI costs $1,080 in America and $280 in France

#122

High health care spending is yet another way the US subsidizes other countries. From the article: "This is a good deal for residents of other countries, as our high spending makes medical innovations more profitable. “We end up with the benefits of your investment,” Sackville says. “You’re subsidizing the rest of the world by doing the front-end research.” In the past 30 years have you heard of any medical innovation…

Medical research spending in the US is approximately $500/person/year. The medical cost gap between the US and other countries is approximately $3,500/person/year. R&D spending simply does not account for for anything close to the huge discrepancy in costs.

Re: Why an MRI costs $1,080 in America and $280 in France

#123
post #16

What annoys me as an American about our health care is not that some other countries achieve better outcomes at much lower cost--it is that they do so in so many different ways. For instance, if they all did it by having the government completely run the health care system, with all doctors working for government hospitals and clinics, and being trained in government medical schools, with all costs set by the governm…

First of all:

"the United States is Cambodia or Burkina Faso or rural India, with access to a doctor available if you can pay the bill out-of-pocket"

Although it dovetails with the well worn narrative on HN, this comparison fails due to the level of care.

Also, from the article comments:

"There are just a couple problems. In 2009, the French Society of Radiology equipment in France was critically undermining care, and the government was refusing to increase capacity, even though people at many emergency rooms couldn't get an MRI even if they needed one because the equipment simply wasn't available. So, yes, the French government has held down the price of MRIs in France...by not purchasing enough MRI machines that one is available at every hospital. If you need an MRI in France, you're rolling the dice that you would be able to get one in a timely fashion.

Second, some of the development of MRI technology happened in Britain. Most was performed in the U.S. Who is paying for the cost of development of this and other new technology and drugs? It's often not the people in places like Canada and France, where government controls hold down prices. Most of the cost of research and development is paid for by Americans. We pay perhaps five times more in the U.S. for some procedures than people in France pay, but the technology might not exist in the first place if we didn't pay this disproportionate share. Once the technology exists, companies keep charging as much as they can in the U.S. to recoup costs and to fund development of the next big thing in medicine, and meanwhile other countries in the world adopt the technology, gaining benefits from it without actually paying the costs. This is Canada, France, and much of Europe. Plenty of medical research goes on in these countries, but American consumers ultimately bear most of the cost. It's an unfair system in many respects, but it's what has kept medical research moving ahead for the last several decades."

Re: Why an MRI costs $1,080 in America and $280 in France

#124
post #104

Earlier quoted context omitted.

I am a physician, and I teach in a medical school. Although they are 2% of total costs, they drive up the cost in unnecessary procedures that patients demand without medical indication. Those $1080 MRIs are often ordered to avoid a lawsuit. That adds up to a lot more than 2%.

My dad is a surgeon, so that's my appeal to authority and anecdote. In my country litigation isn't a problem, but unnecessary treatment is. People go doctor shopping to find one that gives them the treatment they want. Same problem, different cause.

You aren't French are you? I seem to remember that being considered a big issue with the French medical care system.

Re: Why an MRI costs $1,080 in America and $280 in France

#125
post #111

Earlier quoted context omitted.

If the US has the leading healthcare for the elderly in the world, how come it comes 36th in terms of life expectancy?

Because healthcare is but one of a zillion factors that influence life expectancy?

Fair point.

I still doubt that it is the extra cost of caring for elderly people really well that is the major factor that is keeping the other costs high though. Especially since there are less very elderly people, as a percentage of population, than in other developed countries.

Re: Why an MRI costs $1,080 in America and $280 in France

#126
post #95
post #90

Earlier quoted context omitted.

A major driver of U.S. costs that isn't discussed in the article is our parasite lawyer class, who drive up the cost of insurance for doctors and lead to widespread over-testing or "defensive medicine". Few Americans are proud of our litigious society.

Malpractice suits are about 2% of healthcare costs, and that percentage is stable, so you're not going to make a huge difference by focusing efforts there. Tort reform is a diversion, not a solution.

Malpractice suits are about 2% of healthcare costs, and that percentage is stable, so you're not going to make a huge difference by focusing efforts there.

The cost to avoid lawsuits adds up with a lot of tests that are not needed. Doctors end up doing whole batteries of tests on everyone to avoid the 1:1000 or higher chance that the person in their office with a headache really had an aneurysm and get the doctor sued for negligence when he sends them home.

Another side effect of all these tests is that many are extremely dangerous. CT scans in particular are ordered way too often and can does people with levels of radiation that lead to problems later in life.

Re: Why an MRI costs $1,080 in America and $280 in France

#127
post #71

Earlier quoted context omitted.

Similarly MedLion ( http://www.medlion.com/ ) provides primary care in Santa Cruz and Silicon Valley for $59/mo + $10 visit in part by not accepting insurance (they claim on their website it saves them 40% in costs). Insurance works great for catastrophic things, just like car insurance and then it clearly makes sense to make it universal. If you could only buy gas through your car insurance--who occasionally would d…

I'm all in favor of universal health care, but having universal (private) insurance without a collective bargaining system raises a lot of problems. For example, here in Italy car insurance is mandatory, but people choose where to make their car repairs, and prices aren't regulated in any way. The results: Once I went for a repair, and got quoted something like 150€ - I told the repairman I thought I was covered by m…

"You know sir, with insurances we have all those additional costs...".

Well, with many insurance companies there can be an additional cost. Submitting the claims, filling out the paperwork, proving the work was done, etc... all add up. Depending on how much work a person does with an insurance company it could easily add up to another full time employee.

Re: Why an MRI costs $1,080 in America and $280 in France

#128
post #117

Earlier quoted context omitted.

I think what all of these countries have in common is that they have a strong entity negotiating prices on behalf of the patients, drastically lowering the price, and to a varying degrees also dictating what treatment is appropriate. The US has these entities too - they are called "insurance companies". As others have commented, people don't comparison shop even if they could. This is simply false. People with low de…

So you are saying that US insurance companies are dramatically lowering the prices. If so, then compared to what exactly? The US has some of the highest costs per treatment of just about anywhere in the world, so if the insurance companies are dramatically lowering prices, then the only conclusion I can draw is that the US healthcare providers must be powering all their equipment by burning money for fuel or somethin…

They are certainly lowering the prices, hence the constant back and forth (literally for 30 years straight) of local market consolidation between the buyers (health insurers) and the suppliers (hospitals/physicians). There are legal fights going on all over the country because of all the pricing issues; Pittsburgh is a great example of how the dominant insurer (Highmark) simply refused to pay the dominant provider's (UPMC) price increase. Highmark's solution? Vertical integration and just buy the other local health system.

In terms of MRIs, you have some odd effects with pricing, particularly when the MRI is seated inside of a massive tertiary care center instead of a standalone facility. If you look at the pricing discrepancies, it is almost always related to getting the MRI done at an academic medical center versus one of the ambulatory care centers. The problem is actually pretty simple: hospitals are terrible at cost accounting and totally game it. Instead of taking the leasing costs over the expected uses of the machine, adding in time for the technician and a bit of a real estate or facility charge, they allocate hospital costs (from all departments/overhead) to services based on their expectations on what they can charge. Michael Porter and his staff at HBS are looking at this right now.

Further complicating MRIs (I'm not sure if this is included in the study's cost estimate) is that radiologists essentially operate in a cartel fashion. They are rarely, if ever, employed by the hospital (like most doctors), but band together and set outrageous prices for reading images. Radiology, despite being non-patient facing and limited liability (they render opinions to other doctors, not patients), is one of the most lucrative medical trades. Eventually, traditional radiology should give way - either through disruption (overseas or computers) or by other doctors simply saying why the heck should a radiologist get money for reading an image I can read myself and will then have to intervene on anyways?

Startups have emerged in price/transparency space (e.g. Castlight Health) and will hopefully start to put pressure on hospitals/physicians to actually compete with one another and bring down costs. Since they have so much local market power, there is only so far an insurer can go without owning an entire market.

Re: Why an MRI costs $1,080 in America and $280 in France

#129

High health care spending is yet another way the US subsidizes other countries. From the article: "This is a good deal for residents of other countries, as our high spending makes medical innovations more profitable. “We end up with the benefits of your investment,” Sackville says. “You’re subsidizing the rest of the world by doing the front-end research.” In the past 30 years have you heard of any medical innovation…

One of the biggest employers in my hometown is the Swedish company AstraZeneca's huge Alderley Park research centre, employing around 3,000 people.

Re: Why an MRI costs $1,080 in America and $280 in France

#130
post #57

Earlier quoted context omitted.

A fact I find distressing is that the poster is largely correct. Somewhere around 70% of biomedical R&D is done in the US, the utter dominance of the US in this market is not controversial. Most of the rest is done in Asia. The biomedical R&D done in Europe is rapidly approaching a rounding error. I, for one, do not like the fact that the entire world is dependent on the biomedical R&D of US companies. Yet that is th…

Bullshit. Show me where you get this 70% figure from? Are you talking about spending or results? I think you pulled it out of your arse, but would love to know. What I found was, European r&d spending is close to what the USA spends. Individual countries spend more as a percentage of GDP than USA. World wide, USA does not appear to be spending anywhere close to 70% of the total on medical r&d. * 2011 Nobel prize for…

The Nobel Prize is for basic research. Once you've done the basic research, you're still looking at spending huge amounts of money, on the order of a billion dollars, and spending 15 years bringing it to market. The drug industry is in trouble even as it is, and obviously they would be in worse trouble if they had to sell as cheaply in the US as they do in the rest of the world.

>So even if the US companies were contributing that much R&D, shouldn't that proportion be attributed somewhat to other countries?

No, at least not for that reason. The important thing is not where the innovator is located, but what market they target.

Post reply on HN