Priced Out

The articles on the cost of healthcare in the US just keep coming and coming.  The media won’t let up as each exposé gets tremendous play on social media and continues the drive for change.  Recent articles on the variations of fees between hospitals as reported by Medicare and the crazy pricing of colonoscopies have fueled this debate.  The latest piece was this extensive story from this weekend’s New York Times.  The article talks about a person needing a hip replacement and after tremendous research and negotiating he had the procedure done in Belgium at a fraction of the cost he would have had to pay in the US.  As of Sunday morning, this story topped the most emailed list which shows the tremendous built up anxiety and interest around healthcare costs and pricing in our country.

Take some time to read the article, but the facts are really the same in all of these articles.  The costs for healthcare are totally out of control.  The actual cost of goods for the replacement part is very low, but when priced at what the market will bear, it is outrageous.  The involvement of middle-men that mark up the product as it moves through the supply chain is also an issue.  Hospitals charge whatever they feel managed care and other insurers will pay and obviously the surgeons, who make much more in the US than in other countries, charge their inflated fees for the procedure.  The story gets a little old but when matched with the personal drama of the patient it lives on and on.

As mentioned, the article points out that after a careful search the patient chooses to have the procedure done in Belgium.  Obviously this is a developed country with high quality medical care.  Oh they do have national health insurance and the total bill for the procedure was under $14,000, which is about 10% of what it would have cost in the US.  The article points out, as do all the articles and all the blogs, that even though we pay much more for healthcare in the US the results we get are not superior or at times not even as good when compared to other countries.  Note that when the patient returns to the US he goes in for a checkup, gets a quick X-ray and is told he doesn’t need to come back as the procedure was a huge success.

It should be noted that as all these articles are being written, the increase in healthcare costs have really slowed down to a rate much lower than experts had predicted.  This might be because of the Affordable Care Act or because of the economy but most agree it is a combination of the two.  Others would say it is a transparency issue.  As more and more stories come out like this one in the NYT, the market reacts.  People begin to question everything and prices get driven down.  Attitudes change.

The concern really is the lack of pushback from everyone involved in the delivery of healthcare in the US.  There is no attempt to justify what is happening.  “Never explain” seems to be the strategy.  Only time will tell if it works.

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