This is absolutely shocking to me. Had my ACL replaced in the UK privately about 8 years ago (no health insurance, paid out of pocket). Total cost was £3000 (+ £600 for initial scan). I could have got it done for free on the NHS but it would have messed up my term time at university.
Like the OP I had meniscal tearing too so more or less directly comparable. (Although obviously 8 years is probably a long time in medical devices so worth bearing in mind).
To put in perspective, that is approximate the same total cost (~$5000) as just _one_ of the pieces of equipment ("Cannula Fast Fix CVD") that the OP lists.
It's one thing if doctors are more expensive because they have to carry higher insurance charges to protect against negligence lawsuits, etc, but that the equipment alone is multiple times the cost seems crazy.
Similar to my experiences as well. I once compared the price of a knee MRI scan across several countries by calling folks I knew.
This is why I was dumbfounded by the call for "innovation" in medical industry at the end of the post. There's plenty of innovation is going on, it's the corruption and extortion we're looking at here: $60K were simply extorted from a person in pain.
Or more specifically from all of us. The author only paid $2400. The whole system is designed to be opaque and non-competitive so they can just bill insurance companies for whatever. I wonder what it would have cost if he said he was paying in cash (hint: a lot less).
You'd think that it should be "a lot less" for someone paying cash, but this is almost never the case (in the U.S., anyway). Insurers can threaten to remove a hospital from their network if the prices get too high. The hospital doesn't want to risk losing the large stream of sick/injured patients from the insurer, and usually couldn't care less about one person deciding to have surgery else for reasons of cost (edit: see last paragraph).
Individuals paying cash (and individuals without insurance) are generally stuck with the "sticker" price for care (higher than what private insurers pay, and significantly higher than what medicare pays (medicare basically gets to "declare" what they're willing to pay for a given procedure and hospitals generally have to go along with it or they'll lose some/all federal funding)).
It's usually very difficult to renegotiate the sticker price without an insurance provider or the government working on your behalf. If it's a time sensitive or life threatening procedure, you'll often have other more pressing action items than haggling over the price. It's even harder to negotiate after the fact, since hospitals make you sign away whatever bargaining rights you may have had before they'll agree to treat you.
[edit]
Finally, hospitals generate the bulk of their revenue from insured patients. They can and do quote higher prices to uninsured patients, but the fact remains that this is a fairly risky patient pool for the hospital, since many of these patients will sign whatever they need to sign in order to get treatment, despite being completely unable to pay the (relatively huge) prices quoted.
Hospitals have incentives to keep this pool as small as possible, and occasionally resort to extreme measures (legal or otherwise) to get rid of these patients [1]. Though the hospitals often aren't able to collect the full price from many of these patients, you would be naive to believe that they won't send collections agencies after you and utterly ruin your credit rating if you find yourself unable to pay.
I've never had major surgery so perhaps it's different for that, but I've found (through periods of no or crappy insurance) that doctors visits are significantly cheaper when you say you're paying in cash.
I got my ACL replaced in Argentina and the cost including rehab was about U$S 3000 having one of the best insurance companies (about 120 U$S a month). If I wanted to use the public care, it could probably cost almost nothing.
It always amazed me that in the US the health of a person is not a right and if you get hurt doing anything you have to pay huge fees.
That's because in Libertarian Utopia everyone of importance will be independently wealthy, and those who aren't, deserve to be trampled by the others. /sarcasm
Libertarians have been complaining about the USA's complicated health bureaucracy for decades. Hell, they've written dozens of books about it. It doesn't take a genius to find perverse incentives in US medical pricing schemes.
But don't let me get in the way of your 30 seconds of hate...
I've met plenty of people whose political views on health care were along the lines of:
Person 1: "You should pay for your own care"
Person 2: "What if you are poor and can't?"
Person 1: "Sucks to be you."
With the possible addendum of:
Person 1: "But charity organizations will cover
the costs for those that can't pay,
because then I can choose of my own
will to put money towards the cause."
Person 2: "What if not enough people donate?"
Person 1: "Well, it sucks to be poor."
[I'll note that "sucks to be you" as an answer could probably be translated as, "I have not thought out my position that far, and I don't like you challenging my views, so I'll give you a short and curt answer."]
Can the issue of who pays for healthcare be adequately separated from the issue of its cost? I think so -- given how wide the disparity in health COSTS (put aside the payer) are between not only countries, but even counties in the US [1].
It would be great if we can talk about the origin of these health costs without getting entangled into who should be paying them. But maybe that's an impossible task.
The Libertarian-in-Chief Ron Paul himself a Physician who claims that the exhorbitant costs in health care are a more recent phenomenon. He quotes how much his costs were to do house-visits (remarkably small), and compares that with the ballooning in costs more recently. While one can argue that Libertarianism is a Utopic view, the rapidly escalating prices of healthcare are not something that is espoused by Libertarian philosophy. I.e. Low health costs and individual responsibility for health paying are not incompatible. Then again, neither are low health costs and universal health coverage. Right now, we have the worst of both worlds: high health costs and individual responsibility for payment.
Can (some of) the ballooning costs be attributed to the costs / time investment in medical school? When Ron Paul went to medical school how much did it cost (adjusted for inflation)? How much more knowledge are doctors expected to have now than then?
Maybe, but not any significant part. As evidenced by this post, only a small portion of the costs are attributable to the work performed by the surgeon. The majority of costs are allocated to facility costs (whose increases in price are not related to tuition costs) and equipment.
Indeed, if there was such a direct correlation between the two, the easiest way to control healthcare costs would be to reduce doctoral school tuition rates. Clearly, this is not a viable solution here because the two are not directly correlated.
Now, it is true that Tuition Costs have risen at a much higher rate since 1960 than Health Care costs on a percentage basis compared to inflation [1] [2] [3], but in aggregate the actual health care costs on a per-individual basis dwarf total tuition costs as part of household income [4].
To be fair, comparing the costs of ACL surgery to Ron Paul's costs for 'making house calls' isn't exactly an apples-to-apples comparison either.
I'm merely pointing out that this is a complex beast with many contributing factors:
- The money/time investment to become a medical professional.
- The increase in the number / complexity of procedures over the years. Our medical knowledge keeps increasing we keep getting more and more ways to fix things.
- Comparisons without details. For example, people like to compare how cheap MRIs are in Japan, but the MRIs that people get in Japan aren't as powerful/accurate as the ones that are charged for in the US. Does this justify the cost difference? Maybe, but maybe not.
When an ACL costs $68k in California and $20k in Illinois and $32K in Delaware, you know that it's not an issue with simply the cost of getting medical training. Something else (I agree, something a lot more complicated than simply the cost of education or differencies in country-specific medical practices) is at work.
I think we actually agree here - the dramatic rise in health care costs doesn't have a single root cause, or even perhaps a readily identifiable root cause. It's systemic, rather than simplistic. Education is a factor, but a small one. Insurance and health liabilities are probably an equal factor. But neither explain disparities in cost within the US (no need to look at comparisons between Japan for that). See my [1] reference two comment posts up for the chart on cost disparities intra-US.
It's quite possible that medical suppliers are using information asymmetry to overcharge in some instances and properly charge in others. Could it be as simple as that? Why is it that the same procedure with the same equipment using similarly trained staff in similar hospitals with similar liability exposures would have such different costs? The only thing I can think of is that medical purchasing is sufficiently complex and with such little visibility and transparency between different establishments that medical suppliers and providers can get away with pricing them "as much as the market can support". But that's just an unsubstantiated theory and maybe there is a reason why the same procedure is cheaper in another state, county, or city.
It's difficult to see which factors are contributing without a similar breakdown for a similar procedure from somewhere else.
Are doctor's costs more expensive in CA due to the increased cost of living? Ditto for administrators, driving up the hospital costs? Is it due to a scarcity of hospital beds / operating tables that the hospital charges 'what the market will bear' in more densely populated regions?
Today with the US-based insurance system, there's usually at least one whole employee at every doctor's office whose only job it is to figure out who pays what, and do all the related phone calls and paperwork. For example talking to every patient's insurance company and turning medical procedures into ID numbers.
If the doctor sends you to get lab work, the lab has its own person that fills that role. If the doctor sends you to a specialist, ditto.
Of course the insurance companies have their own hordes of employees who write all the rules of who pays what under what circumstances, keep the books of all the patients' deductibles and all the providers' bills, etc.
None of these employees does anything economically productive. They just move money around.
Obamacare requires that people buy health insurance, which protects this bureaucracy with a legal mandate to purchase their services, and creates more bureaucracy, on the government side, to administer the law.
How can you guarantee the health of a person? Doesn't that incentivize risky activities? If someone else will pay to stitch you up if you get injured, or cover your drugs if you get sick, or keep you going in your old age if you make terrible long-term lifestyle choices: wouldn't that skew the overall population toward cheaper, more convenient, or more fun decisions at the expense of the state?
I live in the UK, so all my medical costs are covered by the state.
However, I still don't go base jumping. Even if the costs are covered, I still don't want to spend six months in traction after I break my back because the parachute didn't open. Similarly almost all the people I know either don't smoke, or want to stop smoking, because even if you can do it free of charge lung cancer just isn't much fun.
You mean your medical costs are covered by taxes you pay and taxes other people (and corporations) in the UK pay and the costs of medical research and development that might benefit you are paid by people in the US.
I think that getting hurt or sick has enough pain or tragedy for itself and thats why people dont want to feel it.
If you hurt yourself and someone patchs you up, its not the same, my reconstructed knee will never feel the same as the other.
I think that you pose people that whant to benefit as much as they can from the state, and I think that I know noneone that does that, at least in health care, nobody wants to go the hospital
There are debates about how much "defensive medicine" adds to the cost, but those aren't all that relevant here since the costs presented are exclusive of additional tests, etc.
$7,638 per person per year. That just can't be right. I and 90% of the people I know haven't made a significant trip to the dr or hospital in years. Where the fuck is that money going?
Incredible! Even more important, I suspect nowadays, most people live more years after 40 than before. Maybe a goal should be figuring out ways we can push back that age.
Cancer elevates cost dramatically. I had cancer at age 41; I kept track of the full costs (not what my insurance negotiated downward) but stopped after my surgery, chemo and radiation treatment passed the $500k mark. I still go in for tests on an annual basis, so my guesstimate is that my total cost just for my cancer has probably surpassed $1 million. Even if that got negotiated down to $100K, that's still a lot. All it takes is one life threatening event, or a chronic condition to skew things out of what we would normally think is "normal" and rational in expenditures.
P.S. Thanks to my excellent doctors, Nathan Green and Richard Pitsch...
> $7,638 per person per year. That just can't be right. I and 90% of the people I know haven't made a significant trip to the dr or hospital in years. Where the fuck is that money going?
Even if the people you know were somehow a representative sample, that's not all that surprising. A significant health event can easily cost orders of magnitude more than $7,638, so even if 90% didn't have one in a period of several years, the average cost could still easily be $7,638 per person per year.
Try getting even a relatively minor health problem like appendicitis and you can go through several times that much in one day. Healthcare would be much cheaper if only we didn't have to deal with all of the sick people.
Also, liability caps are the stupidest way of dealing with the potential for frivolous ligation. It punishes the people who were actually injured, not the ones who filed a nuisance suit hoping for a small payout. It's utterly non-sensical!
We hear about medical tourism from the US to India, Thailand, etc., but with these kinds of price discrepancies between the US and UK private practices, I wonder why there aren't more Americans who go to the UK for surgery?
The fraction of patients without insurance but with enough cash and motivation to fly to the UK purely to seek savings on medical treatment has got to be fairly tiny.
My impression is that medical tourism from the U.S. is not typically for cost savings, but rather because particular procedures are either completely unavailable (experimental stem cell treatments) or could require long wait times (liver transplants). I'd love some data on this. Wikipedia's rather poorly written article suggests MT is more popular from countries with socialized systems in order to reduce wait time, but I'm skeptical.
> The fraction of patients without insurance but with enough cash and motivation to fly to the UK purely to seek savings on medical treatment has got to be fairly tiny.
Well, if my options are to spend 60 grand on an ACL repair in the U.S., or significantly less than that on a first-class ticket to London, some serious fun, and an ACL repair...I know which one I would choose.
Those weren't your options. As with most things health related in the US, someone else was paying (the "insurer" in this case). Given the choice between you paying $2,400 in the US (and the insurer paying an amount you don't see or care about), or you going to the UK and paying 3,000GBP plus accommodation and tickets, I'll bet you pick the former.
Were we looking at the same Wikipedia article? Its first sentence is "Medical tourism (MT) is patient movement from highly developed nations to other areas of the world for medical care, usually to find treatment at a lower cost." Later: "[I]n the US, the main reason is cheaper prices abroad." And while I agree that it's not especially well-written, it does provide some hints as to why even insured people might like to go: elective cosmetic surgery, elective orthopedic procedures that may not be necessary but may improve quality of life (knee replacements, etc.), or reproductive procedures like IVF, all of which may not be covered by insurance.
> I wonder why there aren't more Americans who go to the UK for surgery?
Because a sizable share of the Americans who could afford even the UK surgery prices plus travel and accommodations to/in the UK also have health insurance which covers the procedure in the US, and makes it cheaper for the patient to have the procedure done in the US even if the total cost is more expensive.
We don't really have any price signals for the vast majority of our health care system, when in reality only a tiny minority of it is hard to price (emergency care is hard to price).
Like the OP I had meniscal tearing too so more or less directly comparable. (Although obviously 8 years is probably a long time in medical devices so worth bearing in mind).
To put in perspective, that is approximate the same total cost (~$5000) as just _one_ of the pieces of equipment ("Cannula Fast Fix CVD") that the OP lists.
It's one thing if doctors are more expensive because they have to carry higher insurance charges to protect against negligence lawsuits, etc, but that the equipment alone is multiple times the cost seems crazy.
Mental.