The most recent
version of the Comparative Price Report from the International
Federation of Health Plans (IFHP) gives us insight regarding the extreme cost
of health care in the United States. In this report, the IFHP looks at
the prices of several commonly used prescription drugs as well as the price of
medical procedures, scans, tests and treatments in seven developed economies
including Australia, New Zealand, South Africa, Spain, Switzerland, the United
Kingdom and the United States. Here is a summary of the IFHP's findings.
Let's open with a graphic showing how much the United States
spends on health care as a percentage of GDP compared to other developed
economies:
As you can see, the
United States has a long history of spending far more on health care (as a
percentage of GDP) than its economic peers, a gap that has grown significantly
over the decades since the 1980s.
Here is a table showing
per capita total health care spending in 2013 for the same group of nations:
At $9,086, the United
States per capita spending on health care is 148 percent greater than the OECD
median. As well, out-of-pocket spending by American consumers was second
highest in the group and, at $1,074, was 72 percent higher than the OECD median.
Now, let's look at the
Comparative Price Report to gain a better understanding of why health care is
so expensive in the United States. Please note that all costs in the
United States are reported as average price (blue bar), 25th percentile (green
dot) and 95th percentile (yellow dot).
Prescription Drugs:
1.) Humira - used to
treat rheumatoid arthritis, Crohn's Disease, psoriasis, ulcerative colitis.
According to IMS Health, Humira was the number two selling
drug in the global market in 2015:
2.) Harvoni - used to
treat hepatitis C. According to IMS Health, it was the number one selling
drug in the global market in 2015:
3.) Xarelto - used as a
blood thinner. According to IMS Health, it was the number 17 selling drug
in the global market in 2015:
4.) Avastin - used to
treat colon, lung and renal cell cancers and certain eye diseases.
According to IMS Health, it was the number 10 selling drug in the global
market in 2015:
Diagnostics:
1.) Abdominal CT Scan:
2.) Cardiac
Catheterization:
3.) Daily Hospital Cost:
Total Cost of Hospital
and Physician:
1.) Normal Delivery:
2.) Knee Replacement:
3.) Bypass Surgery:
As you can see, in most
cases, the average cost of prescription drugs, diagnostics and costs of
hospital stays and procedures in the United States far exceeds that of other
nations. In many cases, even the 25th percentile costs are higher than or
just slightly lower than the average costs in the other six nations in the
study. This is particularly the case for coronary artery bypass surgery;
with more than 200,000 procedures performed annually in the
United States, this is a very high cost, relatively routine use of
highly-priced medical services. One of the relatively low cost
diagnostics, at least compared to the six peer nations in the study, is a
colonoscopy with American patients paying an average of only $1,301 compared to
$1,421 in New Zealand and $3,509 in the United Kingdom. Unfortunately, it's
not really a diagnostic that one would seek on a regular basis!
This study by the
International Federation of Health Plans provides us with a cross section of
health care products that many of us will have to avail ourselves of at some
point in our lives. As we can see, American consumers of health care are
generally paying far more than their peers in other developed economies, a situation
which seems to be totally ignored by Washington. Perhaps this
explains some of Congress's reluctance to involve themselves in actually fixing
the problem:
The FIRE sector contributions explain a lot, as well.
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