Why an MRI costs $1,080 in America and $280 in France • Hacker News Board

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

#131

Post by yequalsx » Sun, Mar 04, 2012, 2:26 PM UTC

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…

Do you have evidence that you are normative in terms of comparison shopping for healthcare? It seems to me that costs won't vary much between providers and that comparison shopping would be a mostly useless thing to do in the U.S. Indeed, your own experience in comparison shopping is that the price differential was not that great.

Health insurers in the U.S. have a captive audience. Most people before the age of 60 who have insurance get it through their employer. What the employer pays for insurance comes out of money that would be paid in salary. It seems to me that the insurance companies don't have a great incentive to lower cost of healthcare. On the surface the evidence suggests that they haven't since procedures cost so much more here than elsewhere.

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

#132

Post by yequalsx » Sun, Mar 04, 2012, 2:33 PM UTC

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%.

As I understand it now, doctors have largely invested in testing companies. When they (not all doctors obviously) - I probably thinking primary doctors - order tests the test is a money maker for the doctor.

Wouldn't a calculation of the effect of litigation include the scenario you mentioned? Otherwise it would seem to be a bad calculation. Do you have any studies that show how often a test is ordered simply to avoid a lawsuit?

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

#133

Post by matwood » Sun, Mar 04, 2012, 2:34 PM UTC

vacri wrote: post #40

rfrey wrote: post #36

Earlier quoted context omitted.

Did you mean "developed countries"? Because I got tired of copying Wikipedia ( http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_p... ) after: Country US$ / US Gallon U.S. $3.74 Vietnam $1.03 Yemen $2.76 Turkmenistan $0.72 Tunisia $3.75 Trinidad $2.42 Taiwan $3.78 Syria $3.15 Saudi Arabia $0.49 Quatar $0.83 Puerto Rico $3.63 Peru $3.60 Panama $3.14 Pakistan $3.46 Malaysia $2.31 Indonesia $2.23 Egypt $1.17

He did mean developed country. The US pays about two-thirds what Australians do for petrol, who in turn pay about two-third what Europeans do for petrol. The panic that the US gets itself into when discussing fuel prices is amusing to watch. Australia is a big country with spread out cities like the US (or even more than the US) and similar wage levels, yet we don't have problems with post-paying cash for our fuel. I…

I never found a single place where I could post-pay with cash - they were all too afraid of drive-offs.

Many municipalities in the US have made post-pay illegal, so even if gas stations wanted to offer it they couldn't.

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

#134

Post by yequalsx » Sun, Mar 04, 2012, 2:40 PM UTC

yummyfajitas wrote: post #110

s_henry_paulson wrote: post #108

Earlier quoted context omitted.

Not true. The largest savings would be in not having to deal with the administrative overhead of our current system. A full 1/3 of the cost of healthcare in America goes into maintaining our system and not into actual patient care.

Um, no. Patient care is the biggest culprit in US overspending on medicine. Administrative overhead is minor. http://theincidentaleconomist.com/wordpress/what-makes-the-u...

The article you linked to doesn't show this. The pie graph at the end has a big green chunk which refers to, "Remaining health care spending". It doesn't say this only pertains to patient care. Also the chart is about spending higher than expected given our wealth.

I didn't find a place in the article that talked about administrative costs (i.e. salaries, bonuses, profits) that go to insurers.

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

#135

Post by jasonlotito » Sun, Mar 04, 2012, 2:41 PM UTC

cpeterso wrote: post #74

Not only do Americans spend more per-capita on health care than Canadians, the American government spends more per-capita on health care than the Canadian government. And yet Americans still need private medical insurance. And depending on how you count, more than 60% of American bankruptcies are for unpaid medical bills and about 78% of those people had medical insurance. https://en.wikipedia.org/wiki/Comparison_of_…

Having lived in Canada for 10 years, and recently moved back to the US because of health care, I can attest that while Canadian health care looks good on paper, it's not. Sure, it's there when you need immediate emergency care. But for anything long term, it's horrendous. Autism, for example, is a perfect example, and something I know first hand. In Quebec? The best thing you can do for autistic children is to leave and get out of there. My wife, a Canadian, was afraid when she first heard about US healthcare, but when she finally got to experience first hand the full brunt of the system, she despised it. We had more help for my son in the first 2 weeks of being in the US then he'd had in more than year fighting for it in Canada.

To top this all off, Canada still has private insurance, and while you don't need it, if you don't have it, it makes for much lower quality of care (and don't think the public option covers essentials, either).

So, no. I could never put my sons through a system like that again. It was down right abuse, and I don't use that word lightly.

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

#136

Post by njs12345 » Sun, Mar 04, 2012, 2:51 PM UTC

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…

How do you explain the low costs and relative success internationally of the NHS (in the UK)?

I've no problem with a free market approach to healthcare when it works. But it seems hypocritical to criticise our approach for involving too much government intervention (something which supposedly reduces efficiency) as not being suitable for the US when it's more efficient than the current US system.

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

#137

Post by ktizo » Sun, Mar 04, 2012, 2:53 PM UTC

malay wrote: post #128

ktizo wrote: post #117

Earlier quoted context omitted.

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…

So if they have been lowering prices for 30 years, why do the prices keep going up?

I know there are increased costs due to medical advances, but this only accounts for half the increase in costs according to studies, so the rise from 5% of GDP in the 60's to 16% of GDP today, especially seeing the massive increase in GDP during that period, does not chime at all with the idea that the insurance industry is lowering prices in any meaningful way.

In fact, any rational observer might well assume exactly the opposite.

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

#138

Post by yummyfajitas » Sun, Mar 04, 2012, 2:54 PM UTC

yequalsx wrote: post #131

yummyfajitas wrote: post #109

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…

Do you have evidence that you are normative in terms of comparison shopping for healthcare? It seems to me that costs won't vary much between providers and that comparison shopping would be a mostly useless thing to do in the U.S. Indeed, your own experience in comparison shopping is that the price differential was not that great. Health insurers in the U.S. have a captive audience. Most people before the age of 60 w…

I don't live in the US, but India does have a health care system fairly similar to the US. The biggest difference is it has less red tape than the US, and insurance companies play a minor role. Most people pay out of pocket and comparison shop.

Costs here did vary significantly for the surgery - the dirty hospital was 0.9-1.5lac (depending on general ward vs private room, etc), the place where I had it done was about 85k. It was the MRI for which the price differential was minor.

I was actually pretty surprised that the price gap was so big - I wouldn't have expected the city hospital to be almost 2x as much as the private hospital.

It seems to me that the insurance companies don't have a great incentive to lower cost of healthcare.

Insurance companies don't have a great incentive to lower the cost of their biggest expense? Um, ok.

On the surface the evidence suggests that they haven't since procedures cost so much more here than elsewhere.

The relevant counterfactual is what procedures would cost absent insurance company negotiation, not what they would cost if US patients had as few MRI's as French patients and US health care workers were paid as little as their French counterparts.

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

#139

Post by danmaz74 » Sun, Mar 04, 2012, 3:00 PM UTC

matwood wrote: post #127

danmaz74 wrote: post #75

Earlier quoted context omitted.

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.

I believe that there are some additional costs. But come on, more than double the price... ;)

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

#140

Post by teamonkey » Sun, Mar 04, 2012, 3:02 PM UTC

iwwr wrote: post #77

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…

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 correct. There are private clinics who essentially claim the costs of their services from the government as though they were an insurance company. Costs that can't be recouped in full are passed on to the consumer or insurance providers, or you can be referred to a public hospital where the same service may be provided for free.

As for waiting times, you may find yourself waiting for years but it's highly unlikely. The median time for surgery in Canada is 4 weeks.