If Europe is more expensive, why do Americans pay more for healthcare?
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For most of these families, the fathers of their children stay home all day and don't work. I admire how these women pull long shifts and work everyday of the week. But when it comes to healthcare, I've heard some ponderous stories that shed some light on how some systems come to get over-worked and require so much money to operate. Maybe our community is the only one in America that this common, but it's a reality where I live.
Yeah I get a little ticked off when my premiums continue to rise when I hardly ever seek any healthcare and my family is rarely sick, and insurance companies count on my never going to help shoulder the burden of the people who do go. I don't mind contributing some to help people who need it, but honestly it's reaching a breaking point with me. The company I work for can't afford to offer a plan better than Obamacare, so even the PPO plan is terrible.
We also need a better way to separate emergency healthcare insurance (which is what we have for cars) from regular routine things that should maybe be paid out of pocket or socialized. We also need to cut down on the abuse and that is what you are talking about. No ER for a cold and less unnecessary tests and cut back on cancer treatments for people over 80 (most everyone is at risk for cancer eventually, this is just a result of aging, not an unfortunate event for a 20 year old).
I would be ecstatic for an option for emergency healthcare insurance, because that's all my family needs. I could cost effectively purchase all other services necessary as needed, and save an enormous amount of money. But like I said, these companies need my money to shoulder the financial burden, so I'm not holding my breath. I just know I could learn to be okay with being forced to pay for other people if they managed it better.
When my wife was about to deliver our first child, she mentioned to her students how the hospital bills can be expensive. Her students were absolutely dumbfounded that anyone would actually pay out-of-pocket (with or without insurance) for a baby delivery. They almost couldn't comprehend the idea that anyone other than the government actually pays for this stuff. Many of those same students came from large families where a single mother literally chose to have many children (with random fathers) in order to qualify for more state-funded entitlements, and unfortunately, that whole mindset evidently perpetuates itself through the generations as kids grow up and expect to repeat the process.
And of course, their votes count the same as my vote.
In the midst of all this partisan debate about what will work best, I keep feeling like nothing can sustain a system that allows so much abuse.
In western countries, those things are "free" because we collectively pay for them. I can't imagine having to pay for child birth. It's just something we are collectively responsible for, because we try to provide basic human rights to everyone.
Same for daycare. As a parent, finding a daycare centre that met basic health standards was one of the most stressful parts of becoming a parent. When the government started subsidizing non-profit daycare, it solved so many problems and made me much more productive at work.
Are you implying that somewhere else, these things are free without someone paying for them?
> I can't imagine having to pay for child birth.
Really? Should raising a child be free then too? Should everything be "free"? How does that work?
Except for rare circumstances, when someone gets pregnant, they choose to get pregnant. It may not be the desired outcome, but if you choose to play with fire, you're just ignorant if you think you can't get burned. It's a proactive choice. So if you don't have the means to deliver the baby (and subsequently raise the child in a positive environment), why did you choose to get pregnant and have the child? Why should everyone else be on the hook for your mistake? Regardless of who pays, children are expensive. Should we really reward people (and yes, that's what the system currently does) who want to make irresponsible decisions and have children they can't afford (in both time and money)?
Perhaps you're really pushing for full socialism? Sounds great! How's that working out in Venezuela?
> If I have to fight all the time for basic things, then yes, I'll start cheating the system
Are you "fighting" to pay your taxes? Are you "fighting" to pay your insurance premiums? We're not talking about a struggle to find the best daycare for your kid; we're talking about paying into a system (whether through the government or an insurance provider) that redistributes wealth from those that can pay to those who "can't", but it only works when people don't abuse the system. And if you have the ability to work, you should be contributing rather than "cheating the system". Otherwise, you're just trying to justify getting something for nothing.
Free, no, but the rest of the developed world has universal coverage and healthcare that costs half what it does in the US per capita, with similar outcomes.
Someone has to pay, yes. The US's way of paying is just horrendously complex, expensive, and inefficient.
Why should every country have the same solution to healthcare? The US was formed as a democracy when 'the rest of the world' was run by monarchs. Healthcare is still a rivalrous good, and if we don't limit it by who can afford it, we will limit by some other ambiguous term like 'need.' My friend's grandma (80 yrs old) just had to fly to the US from Paris to have a surgery for which the French system deemed her ineligible (she was too old).
Single-payer systems have a variety of implementations - Australia has a vibrant private insurance industry alongside their public system, whereas Canada forbids it.
It's quite clear that the US healthcare variant simply isn't working and isn't sustainable. I pay more for my family's health insurance ($2,000/month) than I pay for my mortgage, and it goes up 10-20% every year (both pre-ACA and post-ACA).
We're well past the point of saying "well, that experiment didn't work, what's everyone else doing that works?"
Our current path is demonstrably not prudent, with a good dozen or more examples of what appear to be prudent approaches to draw from.
No, but I know people who pay for insurance and still have a $4k co-pay for childbirth.
> but it only works when people don't abuse the system.
It used to be that we paid insurance, and were covered. Now it's we pay insurance, and also pay a larger portion of care than we are used to.
In this case, both problems are essentially the fault of the government. Choice (a) only happens in a system (like we currently have in the US) where the government imposes artificial limits on competition in the healthcare industry. Choice (b) currently happens because the government mandates that healthcare providers give care to non-paying patients, in addition to the government-sponsored entitlement programs (which often pay providers far less than the actual costs require).
[1] If it's just price gouging, then (in a free market) there would be a huge incentive for someone else to enter the market with lower prices; they'd be able to sweep the market overnight - at least until someone else came along to undercut their prices, and we'd all benefit from paying something closer to actual costs. But in the artificially regulated healthcare system of the US, unfortunately this doesn't happen.
We haven't had a deregulated healthcare industry/market in the United States for a very long time (in fact, "healthcare" as we know it never existed in the US without massive regulation). I'm not sure anyone can make that claim based on real evidence, at least not in the US.
I think you meant "free market", not "deregulated"? and where supporters of free markets will always push for more deregulation because they'll blame whatever little regulation is in place in order to support their utopia. Heard that before.. all watched over by machines of loving grace.
But your political influence is much greater with money
The popular vote is for welfare clones
I think I added to the conversation and this is a also a reality I live in. Kickback and relax, emphasis on kickback, is way more effective in creating favorable political situations for me and everyone I know, than a popular vote. Some jurisdictions formalize it with synonyms, others don't. Do I have to write massive disclaimers and sources for accepted reality just to avoid being shadowbanned?
I have no idea what would happen if people were to start abusing emergency rooms and ambulances for regular care, but I think it would make a lot of sense for emergency rooms to just direct people to their regular physician.
The solution is to make the consumer participate in driving costs down. One employer I know of has an excellent solution to the problem: Make employees pay 100% of the bill up to a certain amount, such as $6000. That's a large amount, but the employer then contributes a large amount to your Health Savings Account (HSA), such as $4000. This amount is for you to keep regardless of whether you have any health bills or not. (This money can be used for medical expenses only, either in the current year or in the future). This means the max you will spend out of pocket per year is $2000. How does this encourage the consumer to scrutinize medical spending? Because the first $6000 of medical spending in a year is "your money". This is money you'd be able to keep in your HSA if you didn't have any medical expenses. This gives the consumer a strong incentive to reduce costs, question charges, avoid unnecessary services, and so on.
The insurance companies and hospitals do not want this, and they seem to prefer to have large administrative bureaucracies and collude on pricing. I'm glad there are many comments making the point about price transparency and competition.
Edit: Just found this somewhat recent article: "those indecipherable medical bills theyre one reason health care costs so much" https://www.nytimes.com/2017/03/29/magazine/those-indecipher...
So maybe 220 days at work per year? I guess that is 6-10% less than in the US.
I know a few people that aren't even in management yet with about 30 days (plus state holiday) and a 35 hours week.
Most people are not aware that the US pays more per capita on socialized medicine than any country except Norway:
https://en.m.wikipedia.org/wiki/List_of_countries_by_total_h...
In fact, the US spends more in socialized medicine per capita than many countries spend in total (public and private): France, the U.K. and Japan, for example.
I think unfortunately only a collapse will offer opportunity for reform.
There are other curious upsells that go on in U.S. healthcare, e.g. off-label prescriptions. That does not happen in Europe as the incentive is not there, the hospital/doctor is not profit motivated to get their patient on the hard drugs, as per the U.S. situation.
Expense begins at birth if you are male - when medical staff get paid for circumcisions then they happen, in Europe there is not this financial imperative so the only people getting themselves circumcised are doing so for religious or actual medical reasons, not just because it is an upsell from the hospital.
The more I find out about U.S. healthcare the leas I see it as that.
e.g. Hamburg vs Seattle https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
The past years I used to travel each year to US, in different parts (Dallas, Chicago, Seattle etc...) and I always had the impression that USA is way more expensive - from the perspective of someone who goes to a restaurant and enjoys good food and a good bottle of wine.
Also health insurance is cheaper here, and my coverage is very good.
In response to the parent comment, the reason it's largely escaped these effects is that the economy is anchored in insurance and financial services rather than manufacturing.
There's also a big ag-tech sector and growing bio-tech industry if you include Ames which is a university town about 30 miles North.
Growing, thriving cities like Houston, Dallas, San Antonio, Atlanta, Charlotte, Phoenix, Minneapolis, etc. are all relatively inexpensive. As are numerous smaller cities like Nashville, Orlando, Salt Lake City, Jacksonville, etc.
The median price to purchase a home in America is ~$240k IIRC, hardly expensive.
Sure, but almost none are nearly as affordable as the parent poster's example.
"Hamburg - Apartment, 1 Bedroom, City Centre - $823/month"
I'm in the so-called "affordable" Midwest, and there's not a single apartment even remotely close to that price, in any city anywhere within 400 miles here. In Michigan, for example, that same apartment will cost at least $1,200/month. This is true despite the fact that our average income is roughly identical to what Numbeo lists for Hamburg.
The right comparison for Wichita is an equally provincial mid-sized town in Germany, say Halle an der Saale. And I'd wager rents get quite similar again, if not cheaper in Germany...
1 City centre bedroom + utilities $1120
The same in Kiel (pop 240k) $810
Dresden (pop 540k): $770
I'd assume only Berlin and Munich will have prices like Hamburg
I am in the definitely unaffordable Bay Area, and you don't have to go 400 miles to rent a 1 bd apt for under $800. Its not going to be in a desirable city and probably not a very nice apt, but they certainly exist. Literally the first listing I found on craigslist was $775 (in Modesto, about an 80 mile drive to San Jose).
That's what the comparison is though, it's using "city center" apartments, apartments inside urban areas. Of which, there aren't any anywhere near that price, in almost any city in the US. (Even somewhere like Detroit).
If you want to look at crappy apartments way outside of town, the comparison still holds up:
> Dresden - Apartment (1 bedroom) Outside of Centre - $392/month USD
That "affordable" Modesto apartment is still about 2X the cost of a comparable unit.
Health insurance and healthcare in some areas, specifically rural or remote, is extremely expensive and noncompetitive. Just like ISPs, some areas just have ONE insurer!
There are more legal risk and cost for doctor, hospital, etc.. in the US, so their insurance is (way) more costly, so their price is higher.
But I don't have any data, so that's just an hypothesis. But if this is true, good luck to change that.
> The notion has lived on despite copious evidence that that the so-called defensive medicine practiced by doctors merely to stave off lawsuits accounts for, at best, 2% to 3% of U.S. healthcare costs. As for "frivolous lawsuits," they're a problem that exists mostly in the minds of conservatives and the medical establishment.
> A new study led by Michael B. Rothberg of the Cleveland Clinic and published in the Journal of the American Medical Association aimed to measure how much defensive medicine there is, really, and how much it costs. The researchers' conclusion is that defensive medicine accounts for about 2.9% of healthcare spending. In other words, out of the estimated $2.7-trillion U.S. healthcare bill, defensive medicine accounts for $78 billion.
> Q. But critics of the current system say that 10 to 15 percent of medical costs are due to medical malpractice.
> A. That’s wildly exaggerated. According to the actuarial consulting firm Towers Perrin, medical malpractice tort costs were $30.4 billion in 2007, the last year for which data are available. We have a more than a $2 trillion health care system. That puts litigation costs and malpractice insurance at 1 to 1.5 percent of total medical costs. That’s a rounding error. Liability isn’t even the tail on the cost dog. It’s the hair on the end of the tail.
Even at the 10-15% number, that's meaning the vast majority of costs still come from elsewhere.
Not the cost of actual malpractice lawsuits
> That puts litigation costs and malpractice insurance at 1 to 1.5 percent of total medical costs.
(We have less doctors that we should, there are structural incentives designed to increase access to hospitals and emergency rooms in low population density areas, our insurance system is designed by the insurance companies, there are mandates about providing services that are not fully funded and on and on)
Cost controls are the reason. Providers can charge anything they want in the US. Not true in the EU.
I am sorry but that's like the opposite of economic logic. Ceritus paribus, more competition means lower prices.
Regarding the actual topic, I've long maintained that a single payer system in America would be much more expensive than a single payer system in Europe because of different priorities of the American consumers (for instance, old people demographic in America, the pro-life nature where a big part of our insurance expenses goes towards saving premature newborn babies). The only way a single payer in America (or in any country) could be cheaper is by offering a different product to the consumers.
It doesn't hold under empirical study of firms of any industry. Competition can be offset by jacking up prices or otherwise hiding the price. Prices are never set by the market, so everyone pays a ransom for the good or service in question, especially in healthcare.
And don't forget that an efficient market needs price transparency. Everybody who has tried asking "How much does this procedure cost" beforehand knows that's far from being there in the US. How can consumers factor in prices in their decision when they simply don't have the ability to compare suppliers (plus people usually want the best and not cheapest healthcare). There is simply no incentive for healthcare provider to lower their cost. Would that bring more patients?
Monopsonies have been well-studied and lower prices without any competition on the buyer's side.
Wait, what? So why is infant mortality so abysmal then?
http://www.cbsnews.com/news/u-s-infant-mortality-rate-worse-...
https://www.forbes.com/sites/matthewherper/2011/03/23/the-mo...
All the tests, the stay, the treatment all came out to a total of about $140.
Contrast this with a recent visit I had to the ER in the US. I have insurance, and my copay for the visit was $150. There is definitely something wrong with the pricing of healthcare in the US.
I am not sure how to solve it given all of the parties involved, but I think adding transparency to the pricing would be a good first step. To those that do not know, the medical industry in the US has an anti-trust exemption. What that means is that they are not required to publish prices. That is why one patient can get a totally different price than another patient getting the same exact procedure.
How can you begin to solve something if you cannot even measure it?
The cost of living in Europe is significantly lower than the US, not higher as the article suggests. Housing, food, everything. Overall I can live on much much less money than I did in the US. This may vary from city to city, but I think in many places in Europe this is true.
But health care is much more expensive in Europe. For me, part of this is due to being a freelancer- the public system is unaffordable for me because I would have to pay double, and pay double with my income calculated at a higher rate than I actually make. The private system is similarly expensive. It costs far more than health insurance in the US would for me. But in general, health insurance is not cheap.
Insurance also includes far less here than in the US. It doesn't include even basic preventative care when you are under a certain age. It also doesn't include stuff like birth control or STD tests. And even for things it covers, it's difficult to get any reimbursement at all from private health insurance. I've also found the medical system in Germany to be atrocious when you actually go to see a doctor. If you end up in the emergency room, you can get good care. But doctors seem to just wait until it gets that bad before doing much and often spout nearly-superstitious nonsense to justify not providing medical care. Maybe they just do this to me because I'm an immigrant though- possible Germans get better care.
As a result, I only have cheap, crappy insurance here. It's currently cheaper and more effective for me to have decent insurance in the US, and fly home whenever I need to go to the doctor. The US medical system under the ACA is amazing, better than nearly all Americans realize.
The 2nd component here is that your premium is 99% of your total health care costs. And, very little arguing with the insurance company. Much nicer to deal with than back in the US where it's rarely 100% coverage and the insurance company is trying to screw you at any opportunity.
> It doesn't include even basic preventative care
My public insurance includes an every 2 years skin screening from the dermatologist, and dentist checkups / teeth cleanings pretty frequently. Other preventative care, I'm not sure of.
> I've also found the medical system in Germany to be atrocious when you actually go to see a doctor. If you end up in the emergency room, you can get good care.
I've been sick a few times. I've gone to a family doctor and an ENT specialist and both I thought were very good. Comparable to treatment I've received in the US. It's unfortunate your experience was so bad but I don't think that is the norm.
I have 2 children so we have quite a bit of experience with the German system and it seems absolutely wonderful from my perspective. One of my kids was premature and I have 0 complaints about how they handled that. She also developed a very serious medical condition a few years later. She was on chemotherapy and required multiple surgeries. I don't know how the health care for this would be in the US but the German health care system handled it great, in my opinion. We've never had to fight with the insurance company on anything except for a $7000 club foot brace which took us a few back and forth letters to get. Not so bad though.
I thought about this more and I think your "problem" is that you are young and healthy and have no kids. You do get kind of screwed in that situation since you are basically subsidizing everyone else. But, it has to be like that otherwise health care would be prohibitively expensive for people who actually need it.
If you have kids over here, you will pay the exact same price for your health insurance as you do now but it will also cover your children. At that point it will be a great deal for you =)
By pay double, I mean that I would have to pay the employers half as well. And on top of that, most public insurance companies seem to have a minimum amount of money that they assume freelancers make, which is often above what I actually make. So health insurance would come out to be 1/3 of my income pre-tax a lot of the time.
There does seem to be some preventative care for older people, but a lot of the stuff my doctors check at yearly visits in the US (basic exams, blood tests, even getting a free yearly checkup at all) doesn't seem to be covered at all if you are under a certain age. There's a lot of nice things about the US system under Obama that I took for granted. Certainly isn't perfect or better in all situations, but there are some areas where it seems significantly better than the system in Germany. So I'm always surprised when I see Americans talking about how great the German system is and treating it like an ideal. It seems like it's good in some situations, but the US system is better in many situations too.
I've heard that care is quite good when people end up in a hospital (and people seem to be kept in the hospital much longer and more easily here than in the US), but from everything I've seen, it can be very hard to get any treatment until it gets that bad. May just be a bad sample set though.
This sample of size 1 (one) is enough to tell me that something is off in the US.
One heated day I punched an object that ought not be punched. Little finger swelled up and didn't quite work correctly. A few hours later said finger was bandaged, and holding a bill for $3,400. No medication. Just looked at, x-ray'd, and bandaged into recovery position. $3,400. US. It would have been cheaper to fly back to the UK and have it looked at - three times over!
To add another anecdote, I got a kidney stone ~5 years ago. The cost for ER admission, a CT scan, some lab work, prescriptions, etc was about "$20,000". However, nobody paid anybody $20,000. I paid something like $1000 and my guess is my insurance via their negotiated rates paid something like another $1000 on top of that. How we got there as a country is a long, complicated story.
Completely agree that the prices they charge to the uninsured are insane. Not sure what the situation is for tourists, but for American citizens, my understanding is that you cant be refused treatment if you don't have insurance. And most (many?) people without insurance just dont pay the bill.
That's not what it costs, that's what they pay at that particular moment. It costs substantially more, which insurance covers out of the premiums being paid.
While there are certainly plenty of cheap ones, there are antibiotics that cost $1k for an oral course like Zyvox.
on a salary of $150,000 you pay more than $75,000 in income tax in many EU countries, then add to that various other taxes like real estate tax etc.
For that you get poor public schools, poor healthcare etc.
Last time I scheduled an appointment at the FREE doctor I had to wait 4 weeks for him to see me.
So I had to go to a private one and pay cash, after already paying huge sums of money for this supposedly cheap and awesome european healthcare.
Waiting times (specially for say for some types of surgery are an issue in Denmark also).
Look, I have extensive experience from inside the the system, maybe I can write a more detailed post about how this works and some reasons why US healthcare can be so expensive, if anyone is interested in that.
But just a quick example, health care costs on national levels fluctuate through the years, and so do collected taxes and hence how much of that pile is allocated to healthcare.
This can result in a doctor treating your son differently in 2016 than in 2017, an neither the doctor or the hospital will tell you this.
For example he might need a surgery, which will be done with an invasive surgical procedure (opening up a person with a scalpel), even though a non-invasive laser procedure is available and the hospital has all the necessary equipment & and the doctors trained.
-- In short, examples of generally best health care systems in Europe are Switzerland, Netherlands, and NOT England (NHS) or France.
https://www.nytimes.com/2014/07/06/sunday-review/long-waits-...
> For example, patients waited an average of 29 days nationally to see a dermatologist for a skin exam, 66 days to have a physical in Boston and 32 days for a heart evaluation by a cardiologist in Washington.
> The study found that 26 percent of 2,002 American adults surveyed said they waited six days or more for appointments, better only than Canada (33 percent) and Norway (28 percent), and much worse than in other countries with national health systems like the Netherlands (14 percent) or Britain (16 percent). When it came to appointments with specialists, patients in Britain and Switzerland reported shorter waits than those in the United States, but the United States did rank better than the other eight countries.
I'm just trying to say it's more complicated than Europe: free, good, public, fair for everyone USA: private, capitalistic, bad, unfair
Also 'Europe' as always is a vague term, there's a difference between Zurich Switzerland and some town in Serbia, Greece or Romania, but it's all Europe.
The U.S. health services for starters could be made cheaper by letting more foreign doctors in, but that has been lobbied against for years by the medical lobby itself on the grounds foreign doctors aren't as good, keeping salaries artificially high for many types of medical staff etc.
In the USA they say we have capitalism and free markets and that is great, in Europe they have 'socialism' and that is bad. Or the Democrats sometimes make the point that something is better in Europe because it's run by the state and therefore not subject to corporate greed etc.
In Europe they same the same thing but inverted. In the states they have ruthless capitalism, they're all greedy, working long hours, shooting each other in the streets, homeless people everywhere. Europe is better because there's more regulation, more services ran by government monopolies, more fair, more "social".
But reality is never so black and white. The US is far from free-market competition in many markets and niches, although it's aggressively marketed as such all the time. And policies in Europe are often far from the "social" "we care for people not profits", and in fact empower small interest groups close to leading parties to profit in state monopolies and other types of dodgy weird stuff under the pretence that it's good and fair for the people.
When you look closely often Europe and America have similar problems, they're just marketed in a vastly different way.
Europe is about bringing everyone to the average. It is not a land of extremes like the US. Your $150k example salary is super super high for Europe so it's going to get pushed way down to be closer to the average.
If you take your example but change the salary to any number in the lower / middle class range, you are going to be far better off.
That is just the nature of the EU vs the US. If you're rich, the US is great. If you're not rich, you're probably better off in Europe.
And that shit is expensive. The way medical competition works in the US is that prices go up when there is more competition because the competing clinics need to keep purchasing the latest technology to keep up. As long as insurance covers the alternatives, we go to the best and most expensive.
In the US we have WAY too much health care.
This raises the question of efficacy of the tests for patients who wouldn't have had the test done when there was less access. If spending more for the tests improves health outcomes, that's valuable, and if it saves money on treatment that's even better.
This is why waiting times isn't a bad thing but actually a requirement for efficient resource use. The number of MRI machines for example should be enough to meet just above average demand so that queue times are acceptable while machines are used efficiently, and queues don't grow longer. If the machines are sitting idle - then that money could have been put to better use elsewhere.
(Expensive machines cost $3 million. Assume operating costs are double that per year and amortize the whole thing in 1 year and you get to $10 million. At the US price of ~$2500, that's 15 uses a day per machine.)
Here the state even decides who can operate a CT scanner
https://www.michigan.gov/documents/mdch/CON-212_CON_Rev_Stds...
I only had to make that choice once, namely with the removal of my wisdom teeth. I'm glad I insisted on local anesthetic.
I'm on the fence about the rate we take them out, but there are solid arguments for it.
Nor are Europeans.
http://cdn.static-economist.com/sites/default/files/imagecac...
Side note: I pay $28k/year in premiums and copays for healthcare, so I'd happily accept the higher tax rates. Employer-paid premiums hide the true costs of the American healthcare system from most.
This. I'm actually shocked at the number of economists currently scratching their heads wondering where wage growth has gone, and when it will return. It seems obvious that the answer is that wage growth never left, it has simply been transferred wholesale to the health insurance side of the ledger so employees don't feel any richer.
(It's extremely hard to lose 60% of your income as income taxes in much of Europe. UK tops out at slightly over 50%)
You can strain it out of GDP to see how much it is: over 17% in the USA, 9.4% in Australia etc: http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS