In Need of _____, But Priced Out of America


There’s a really good long-read in The New York Times from Elizabeth Rosenthal on medical tourism and, specifically in this instance, the hip and joint replacement industry. The primary person profiled, Michael Shopenn, had health insurance but it wouldn’t cover his artificial hip because it was  — wait for it — considered a preexisting condition. The cost of paying out of pocket for a new hip in the United States was, unsurprisingly, prohibitively expensive. With comparatively unique connections, and even with more savings than the average person, the best deal he could find was a decidedly unaffordable $78,000.00. So he began to look outside of the country for a cheaper option and eventually settled on Belgium. There he spent $13,660 for, well, everything:

That price included not only a hip joint, made by Warsaw-based Zimmer Holdings, but also all doctors’ fees, operating room charges, crutches, medicine, a hospital room for five days, a week in rehab and a round-trip ticket from America.

This isn’t an an unfamiliar story. Our healthcare system is a complicated, expensive, mess. For anyone who spends even an insignificant amount of time reading up on healthcare spending and pricing comparisons between countries there is an almost universal truth; America spends more, and it’s prices are much higher (PDF), than every other developed country in the world. So what are these countries doing that we aren’t?

Well, many things, but these types of investigations all have one thing in common. Like a book of short stories wherein every chapter starts with the same question (“What’s the difference?”) the ending answer is always “the government, stupid.” Whatever the overall framework, from the U.K.’s all-government system to Sweden’s regulated private competition (PDF), the state plays a heavier hand in setting costs to a much more sustainable level than in the United States. Even in the (purportedly) conservative healthcare utopia of Singapore there is a level of government intrusion that would make the “individual mandate” in the Affordable Care Act seem tame in comparison.

Of course the 2010 healthcare reform law seeks to reign in these cost problems to some extent. But contrary to popular grassroots convention ‘Obamacare’ isn’t so much a government takeover of healthcare as it is the state mandating a higher floor of coverage and enticing everyone to participate in a still complicated, still comparatively expensive, mess. It isn’t a revelation that, absent some outside miracle of national healthcare expenditures plummeting (for the long-term), more reform will be needed.

This isn’t to say that we can only reduce costs to a similar level through straightforward mimicry of other country’s healthcare systems, but there are some basic (if politically difficult) actions we could undertake that are molded in a similar fashion to what we know works elsewhere. We could enact much-needed reform related to physician pay-setting in the RUC. Congress could allow the federal government to directly negotiate drug prices. For a more radical avenue would could actually offer a (deficit-reducing) public option tied to the rates Medicare pays.

Would these proposals still elicit passionate prophesies of an apocalyptic American future? Probably. Yet if we consider the cost of healthcare too high — for individual citizens, private and public institutions — there is one cold, hard, truth that we could accept to change that; government works.


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