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eridani

(51,907 posts)
Fri Apr 18, 2014, 09:00 PM Apr 2014

US health care prices are NOT higher because we use more services

http://www.ifhp.com/1404121

“First, it gives the lie to the idea that some countries spend more on health as a result of higher utilization. It is all about unit price,” he said. “Second, we have looked here at a number of procedures and products which are identical across the markets surveyed. The price variations bear no relation to health outcomes: they merely demonstrate the relative ability of providers to profiteer at the expense of patients, and in some cases reflect a damaging degree of market failure.”

Prices examined in the study included those from Argentina, Australia, Canada, England, Netherlands, New Zealand, Spain, Switzerland and the United States. The data for the report was gathered from participating IFHP member organizations in each country. Prices in the U.S. were based on prices negotiated between private health plans and health care providers.

2013 Comparative Price Report
http://static.squarespace.com/static/518a3cfee4b0a77d03a62c98/t/534fc9ebe4b05a88e5fbab70/1397737963288/2013%20iFHP%20FINAL%204%2014%2014.pdf



http://www.vox.com/cards/health-prices/america-is-getting-gouged-on-health-care-prices

Most other countries have some central body that negotiates prices with hospitals and drug manufacturers. Tom Sackville (chief executive of the International Federation of Health Plans) who used to work for Britain's health care system, recalls that it would have a unit of 14 people whose whole job was getting drug manufacturers to give the country a better deal on prescription medications.

That unit of 14 is essentially buying in bulk for a country of 63 million people – and can successfully ask for steep discounts in return.

The United States doesn't have that type of agency. Every insurance plan negotiates individually with hospitals, doctors and pharmaceutical company to set their own prices. Insurers in the United States don't, as these charts show, get a bulk discount. Instead, our fragmented system means that Americans pay more for every type of health care that IFHP measured.

"You could say that American health care providers and pharmaceuticals are essentially taking advantage of the American public because they have such a fragmented system," said Sackville. "The system is so divided, it's easy to conquer."



http://www.nytimes.com/2014/04/18/business/treatment-cost-could-influence-doctors-advice.html?hp&_r=0

Still, it is unclear if medical societies are the best ones to make cost assessments. Doctors can have financial conflicts of interest and lack economic expertise.

The cardiology societies, for instance, plan for now to rely on published literature, not commission their own cost-effectiveness studies, said Dr. Paul A. Heidenreich, a professor at Stanford and co-chairman of the committee that wrote the new policy.

They plan to rate the value of treatments based on the cost per quality-adjusted life-year, or QALY — a method used in Britain and by many health economists.

The societies say that treatments costing less than about $50,000 a QALY would be rated as high value, while those costing more than $150,000 a QALY would be low value.

“We couldn’t go on just ignoring costs,” Dr. Heidenreich said.



Comment by Don McCanne of PNHP: The International Federation of Health Plans represents private health insurers in 25 nations. Its members include several U.S. health insurers plus AHIP - the powerful insurance lobby in the United States. Although many would argue that it is this industry that is tasked with the responsibility of negotiating fair prices for health care services and products, in this release they contend that the very high prices in the United States “merely demonstrate the relative ability of providers to profiteer at the expense of patients, and in some cases reflect a damaging degree of market failure.”

What a remarkable statement. We are paying the insurers massive sums for their very expensive administrative services while they inflict tremendous administrative burdens on the health care delivery system, plus they take away from patients their choices in health care, especially choices of their health care professionals. They concede that they cannot control the “ability of providers to profiteer,” nor can they correct this market failure. They have become a profoundly expensive but useless appendage to the health care system - an appendage that should be severed.

Nevertheless, prices are still too high in the United States, so what can be done? Consolidation of hospitals and physicians has been anti-competitive, but prices were already high before the recent wave of consolidations began. Some providers offer services that make them “must have” participants in the insurer networks. They have a greater ability to stand firm on high prices, thus it is unlikely that antitrust enforcement could have more than a negligible impact on reducing prices.

Physicians seem to be more sensitive to cost barriers for their patients than do the hospitals and pharmaceutical firms, though both of the latter do have programs for selected indigent patients. The New York Times article describes how physician organizations are beginning to address the issue of high prices, though much of the effort seems to target the pharmaceutical firms rather than the physicians themselves. What is really remarkable though is that some physicians are now willing to look at assigning a monetary value to a quality-adjusted life-year (QALY).

Do physicians really want to assume the role of telling their patients that they will deny care that may be of some benefit but exceeds an arbitrary cost threshold assigned to a QALY? Physicians traditionally have not been the payers for their own patients’ health care. That is usually an insurer, the government, or the patient paying in cash. Shouldn’t the payer be making the spending decisions instead of the physician?

The insurers have a terrible track record - often paying too much, but also creating access barriers to care. The government has done a better job with Medicare, but with Medicaid they have often underfunded care which also creates financial barriers to care. With today’s very high health care costs, most patients are unable to pay cash if they face major medical expenses, so a third party payer is required.

Some models today would place the physician at least partially in the role of insurer. What is surprising is the relative silence on the ethical violation that such a role entails. The physician should never be placed in a position in which he profits by withholding beneficial health care. The MBAs in health care do not seem to understand the fundamental ethical compromise of such an arrangement.

The IFHP report on international health care prices does show that other nations are much more effective in controlling prices. They all have in common the fact that the government plays a major role in administering or tightly regulating prices. In general, governments seem to get it right. If we had a single payer system, we would get it right as well. In doing so we would also eliminate the profound waste caused by the private insurers, and we would ensure that financial barriers to care are removed for everyone.

What about defining the value of a QALY as ranging from $50,000 to $150,000? That should not be the role of the physician who should always be in a position to advocate for what is right for the patient. That should be the role of the public administrator who negotiates health care prices. A better term than negotiation would be price administration, implying that the government should have an “unfair” or unbalanced clout when it comes to getting prices right. Right prices means legitimate costs plus fair margins. No other country will be paying $84,000 for a twelve week course of Sovaldi to treat hepatitis C. We wouldn’t either if we had a single payer system.
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mucifer

(23,374 posts)
1. But, most single payer countries do not allow the extensive aggressive treatment that we do at end
Fri Apr 18, 2014, 09:14 PM
Apr 2014

of life. Doctors are allowed to say "there is nothing more we can do" more in other countries that have single payer keeping people alive for weeks or months in an ICU with lots of IV drips and powerful machines is very costly.

 

Doctor_J

(36,392 posts)
4. and we give blood-sucking "insurance" companies 20% or more to deliver nothing except
Sat Apr 19, 2014, 11:53 AM
Apr 2014

obstacles to care. we're pretty much of a Banana Republic of corruption. When the president changed his campaign pledge of SP to Heritage Care, the scales fell from my eyes.

 

Doctor_J

(36,392 posts)
6. Some of don't have 50 years to wait
Sat Apr 19, 2014, 04:11 PM
Apr 2014

and also realize that the setting will never be better than it was in 2009-2010. We also don't believe the DEMOCRATIC party should being taking victory laps for passing a Republican insurance windfall and calling it health care.

eridani

(51,907 posts)
7. Anyone watching the 2009-2010 debates has to conclude--
Sat Apr 19, 2014, 08:29 PM
Apr 2014

--that we aren't going to get national single payer soon.

nationalize the fed

(2,169 posts)
8. I watched them and what I saw was a (D) having single payer advocates
Sat Apr 19, 2014, 08:42 PM
Apr 2014

arrested at a hearing.

But he gets a pass, no one hardly remembers.



Now he's ambassador to China, where he's probably working even harder for the poor and middle class.

What a joke. Except it's not that funny if you pay attention.

eridani

(51,907 posts)
9. The domino theory may have been bullshit when applied to Vietnam--
Sat Apr 19, 2014, 08:44 PM
Apr 2014

--but let a few states pass single payer, and I think it may very well apply here. It did in Canada, anyway.

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