Why Healthcare costs so much in the U.S.

Here's an interesting story in the Washington Post that links to charts comparing the costs of common healthcare usage units in the U.S. vs. other countries. His conclusion is that we don't necessarily consume more healthcare - it's just that we're paying alot more for the same thing - our system isn't very good at buying healthcare.

Example:
Average cost per hospital day:
U.S.: $3181
Canada: $837
France: $1050
Germany $550
Netherlands: $502
Spain: $579

This is just one of many chart comparisons shown. Really good stuff.

I think we've gotta admit something is seriously broken/wrong with our health care system before we're willing to move on to try something else. To a large degree I think simply the idea that centralized healthcare can work better than the free market alternative is "ideologically incompatible" with the standard American mental framework that we discard the possibility that the free market has completely failed the country when it comes to healthcare. It's not even a close debate in my book but we still want to hang onto this broken thing we have for some reason.

Healthcare: A failure to communicate

I'm probably talking out of school here - but I find the national debate on heathcare to be pathetic. We've become a nation so tied up in ideology - so hardwired into pre-conceived notions of what should be, that our debates increasingly tend to start and end with the way we think things should be rather than how they are. We're increasingly becoming a nation of ideologues rather than practical thinkers.

I'm so disappointed with the national healthcare debate because I don't think even the most fundamental issue of cost is even understood at the simplest level by the voters. At it's core I think we are seeing a massive failure to communicate.

At it's core is the issue of cost I pointed to a short while back. Why do we spend twice as much as most other comparable countries on healthcare? I can't get past this graph showing national healthcare expenditure vs. life expectancy (yes, click the link and digest the graph - it's important) for countries around the world. Why is it so hard for us to admit that the system we have is the most expensive system in the world - by far - without producing a noticeably healthier outcome?

Some datapoints from just eyeballing the graph:

Healthcare - - - -
Spending - - - - -life
per/capita - - - -expectancy

$6200 - - - - - - 77.9 yrs United States
$3200 - - - - - - 79.0 yrs Canada
$3300 - - - - - - 81.0 Australia
$3400 - - - - - - 80.5 France
$3300 - - - - - - 79.0 Germany
$1500 - - - - - - 78.5 South Korea
$2300 - - - - - - 82.0 Japan


And here's the thing... I don't have a clue why I have to pay so much for my health insurance. I have no idea. Why is healthcare so much cheaper everywhere except in America? And if the care is really that much better, I need to understand what our extra $3000 per year per person is buying and why it's worth it.

Rationing in public health care

This article in the NYTimes was thought provoking - basically arguing that we are all in favor of rationing of health care unless we've got the cash to pay for everything ourselves.

This question illustrates the basic argument:
"Public Health Insurance should pay up to $__________ for a treatment that would extend a patient's life by 1 year."

Is the answer $10,000? $50,000, $100,000, $500,000, $1,000,000, $10,000,000, $100,000,000? .... I get the point. We already ration health care - there is a limit to what we spend on it - we just don't think about it explicitly. The question is how much value do we place on extending life?

An interesting corollary - it makes more sense to spend more on health care for younger people (who might live 40 yrs if they survive a crisis) than older people who are likely to have shorter expected life spans. (the same treatment extends the life of a younger person longer than the life of an older person).

Graph of the Day: Healthcare Spending

Graph of the day.

Per capita health care spending vs. average life expectancy.

Now you know. The U.S. tends to spend about twice as much on healthcare as the average country shown, and we don't live as long.

This one little fact made my day and is worth more than all the blathering about healthcare ideologies I've heard in a long time.

Tips to Marginal Revolution for the link.

Prostate studies

Studies cast doubt on value of prostate screenings, especially in the context of the impact of unnecessary treatment.

As I read it there's alot of confusion around the whole issue.

Comparing effectiveness of health care treatments

...part of the new spending bill as reported by the NYTimes

The program responds to a growing concern that doctors have little or no solid evidence of the value of many treatments. Supporters of the research hope it will eventually save money by discouraging the use of costly, ineffective treatments.
...
For many years, the government has regulated drugs and devices and supported biomedical research, but the goal was usually to establish if a particular treatment was safe and effective, not if it was better than the alternatives.

Excellent points on Health Care

I found this post on Marginal Revolution excellent reading as the health care debate heats up in the campaign.

Some key points:
- spending more $ does not increase health result outcomes in many cases, so be wary of a plan proposed that does this. The US is a huge spender and does not produce commensurate result. (Does this sound somewhat like the conversation around our approach to education also? Lots of spending without as much result?)
- pharmaceuticals are one area where spending does seem to produce results.