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

washingtonpost.com

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

#171

Post by phren0logy »

yequalsx wrote: post #152
phren0logy wrote: post #146

Earlier quoted context omitted.

Even if many testing companies are owned by doctors, the overwhelming majority have no stake in one. Citations re: excess testing: http://www.ncbi.nlm.nih.gov/pubmed/15928282 http://www.ncbi.nlm.nih.gov/pubmed/10136689

The second link hardly endorses your view. It says Although our estimates delineate a wide range of potential savings, systemwide savings from aggressive malpractice reform could approach $41 billion over five years. According to one source [1] the U.S. spent $2.6 trillion in health care in 2010. An $8 - $9 billion dollar savings per year from eliminating defensive medicine hardly adds up to " a lot more than 2% ". […

I agree that the second link is saying more about the effects from malpractice reform. I have seen the Kaiser study, and what I think they are not taking into account is the culture of defensive medicine that may physicians don't even think about. For example, an MRI is more likely in a US Emergency Room than in a UK Emergency Room. UK practice is (in general) evidence based, and they won't order it unless it makes sense to do so. May US physicians would not identify this as "defensive" because the practice is so widespread, although the root reason for ordering it stems from that cause. I am not aware of an analysis that takes this into account.

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

#172

Post by nooop »

phren0logy wrote: post #97
Joeri wrote: post #95

Earlier quoted context omitted.

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.

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%.

Yeah but 2% of a very high cost is higher than it would be if the cost is lower (obviously). Of course you won't cut the costs much by targeting those 2% at first, but if you ever get to reasonable prices those 2% would transform in 7% and 7% is starting to be notable.

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

#173

Post by nooop »

ktizo wrote: post #168
J3L2404 wrote: post #123

Earlier quoted context omitted.

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, an…

That comment seems to claim that the French government is keeping the cost per scan low by having less scanners available to people. Now, I'm no economist, but that argument does seem to make absolutely no sense whatsoever.

In a way this can happen (though i'm far from being sure it actually does...): the medical area is one where the prices are the most regulated. In the public sector the prices for an MRI are probably very largely fixed by the government (and more probably completely) and given that even in the private sector you need an authorization to build an MRI counting them mean the medium price will not increase too much and the public operators might have less arguments to ask the government for price increase. Of course that would maybe not destroy effects of offers and demand and I don't know which one would win in the long term. But remember that health is a very different market than commodities and trying to compare the economics of health vs. crews and bolts by using crews and bolts theory might not going to work well.

The lack of MRI is a big problem in France anyway. Regardless of the effect on prices (except maybe if they triple or something like that) having 100% more would be a lot better.

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

#174

Post by DanBC »

_delirium wrote: post #170
iwwr wrote: post #77

Earlier quoted context omitted.

Don't forget that in Canada it's illegal to be a private medic. Medical services are ostensibly free, but rationed through queues. If you have a medical condition that's not immediately threatening, you may find yourself waiting for years for treatment, or have to go across the border to buy it.

That's not a requirement of such a system, though; France has a dual public/private system, where everyone is guaranteed service at the public system, but well-off people who wish to pay extra can purchase private care.

That's true of the UK system too. People get public treatment, but can go private if they wish. There are some restrictions on novel cancer medications if those are shown to be both expensive and minimally effective. I don't know if it's a good thing that dying people are protected from high pressure selling of pharmaceutical companies or whether the government should just allow people to spend tens of thousands of pounds on medication that may not extend their life and may not improve (and may decrease) their quality of life for the remaining weeks they have.

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

#175

Post by quatrevingts »

shingen wrote: post #88
tzs wrote: 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…

It's not difficult to figure out what happens to a marketplace when you remove the competition with government mandate. America's health care system has been hyper regulated for decades. You can't even shop across state lines effectively. We have the worst of both systems. We have enough government interference to drive up prices through restriction of competition, bad regulation, bad mandates; and we have government…

Of course, all of the countries with good health care have more regulation, not less. (Yes, even in Switzerland.) Do you know of any countries with minimal health care regulations and good outcomes? I suspect they don't exist, because the preconditions of a functioning free market do not exist for health care consumption (rational consumers, symmetry of information, consumer choice, etc.)

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

#176

Post by nooop »

pash wrote: post #160
mikeash wrote: post #122

Earlier quoted context omitted.

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.

You're missing the point. High prices for drugs, procedures, and medical devices in the United States are what makes their development financially feasible. Without the American market, the expected payoff to new medical technologies would be much lower, so it's reasonable to believe that fewer would be commercialized. Americans bear the bulk of these costs, which are passed along in the price of their treatments, be…

Yeah America makes the whole medical R&D, right. Seriously.

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

#177

Post by jasonwocky »

Symmetry wrote: post #165
yequalsx wrote: post #148

Earlier quoted context omitted.

Insurance companies don't have a great incentive to lower the cost of their biggest expense? Um, ok. They only have such incentive if it increases their profit margins. There are a number of scenarios where this wouldn't be the case. They aren't interested in lowering cost just for the sake of lowering cost. I don't have data either way and so my belief in this is easily shaken.

I'm confused, could you name a situation in which this wouldn't be the case? The profits that an insurance company makes are the amount it charges for its services minus the amount that it pays out, it seems that reducing the amount they pay out would necessarily increase profits. I'm not aware of any insurance companies that charge on a cost-plus basis, and the insurance companies can't just charge companies as much…

One situation: if they believe that their competitors will follow suit. Unless an insurance company concocts a way to lower costs that isn't easily replicable, they have little incentive to do so. Otherwise, they're just triggering a race to the bottom.

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

#178

Post by nooop »

18pfsmt wrote: post #83

Without yet reading any of the other comments, I have an anecdote that may be interesting to others: One of my father's business partners has a mother that lives in France. She is ~88 years old, and the family's net-worth is on the order of 100s of millions ($USD). She had a medical condition which required surgery, but due to her age, she was not eligible in France, so she had to come to the US for her surgery. So,…

> but due to her age, she was not eligible in France

I call bullshit on that. Due to general condition maybe, but if you are in great shape except on one risky point and the risk of treatment seems acceptable you are not going to be refused treatment because you are too old.

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

#179

Post by nooop »

shingen wrote: post #119
ck2 wrote: post #113

Because if it was $280 in America the insurance ceos, investors, doctors and administrators would not be able to buy their second vacation homes. As long as healthcare is a profit center, you will only have the right to die quietly if you cannot afford it in America.

It's a profit center whether you like it or not, with or without the government. With the government the profit goes into the bureaucracy. The medicare + medicaid system has shown itself to be an extreme profit center for government employees and the bureaucracy. They take home massive sums in profit: wages and pensions. The government doesn't make the system more efficient by reducing profit from the equation. They…

It is good to have highly paid nurses if it correlates with other good factors, else it is good for nurses but pointless for the general public, or even bad if it means the latter is being ripped off and the costs are absurdly high compared to other countries.

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

#180

Post by rsynnott »

yummyfajitas wrote: post #109
Nitramp wrote: post #92

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. It'd be really nice if health care could work like a regular market, but evidence and intuition suggest it simply doesn't. As others have commented, people don't comparison shop even if…

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…

> The US has these entities too - they are called "insurance companies".

As mentioned in the article, American insurance companies appear not to be very good at negotiating prices, partly because the providers are permitted to negotiate different prices with different companies, and to treat these negotiated prices as trade secrets. This is a highly unusual state of affairs.

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