In its first piece of real journalism in a generation, Time Magazine has a massive exposé into just why US medical costs are so high. As the author says, the US health care debate is all about 'who should pay' and never looks at why US hospitals charge multiple times the price of other developed countries. He finds that officially 'non-profit' hospitals are actually massively profitable.
Time: Why medical bills are killing us
The reason is simple. US hospitals massively and outrageously overcharge their 'customers'. Example charges include:
* $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare
* $13,702 for “1 RITUXIMAB INJ 660 MG.” The average price paid by all hospitals for this dose is about $4,000
* $995 for the ambulance ride
* $18 each for Accu-chek diabetes test strips. Amazon sells boxes of 50 for about $27, or 55¢ each
* $7 each for “ALCOHOL PREP PAD.” This is a little square of cotton used to apply alcohol to an injection. A box of 200 can be bought online for $1.91.
This lengthy article is well worth a read. The ultimate point is that without price regulation, hospitals can charge what they want and make massive profits at the expense of the sick and the poor. Hospital overcharging is the reason why the US medical insurance system is broken and unaffordable, and why 60% of personal bankruptcies in the US are due to medical bills.Unlike those of almost any other area we can think of, the dynamics of the medical marketplace seem to be such that the advance of technology has made medical care more expensive, not less. First, it appears to encourage more procedures and treatment by making them easier and more convenient. (This is especially true for procedures like arthroscopic surgery.) Second, there is little patient pushback against higher costs because it seems to (and often does) result in safer, better care and because the customer getting the treatment is either not going to pay for it or not going to know the price until after the fact.
And ultimately, in exchange for spending 20% of GDP on their health care, Americans are more unhealthy and live shorter lives than than people in other rich countries where health spending is less than half that. The article also points out that Obamacare - which is all about the insurance companies - wont even try to fix the issue of price regulation.