After decades of explosive growth, the cost of health care has climbed at a snail’s pace over the past three years. As the White House boasted this week, per-capita medical spending is now rising at just a third the rate the country has seen for the past half century.
Unfortunately, we're still overpaying wildly for most medical products and procedures. The latest international cost comparisons, released last week by the International Federation of Health Plans, highlight an array of dramatic disparities.
A one-day hospital stay averaged $4,293 in the United States last year, according to the federation’s 2013 Comparative Price Report. That’s nine times more than hospitals charge in Spain, and three times the Australian rate.
The report reveals similar price disparities for a range of common medical procedures, from childbirth to hip replacement, and for drugs aimed at everything from heartburn to cancer.
• The average MRI scan cost eight times more in the United States than in Switzerland ($1,145 versus $138).
• Americans paid nine times more than Canadians ($896 versus $97) for an abdominal CT scan.
• A bypass operation cost nearly five times more in the U.S. than in the Netherlands ($75,345 versus $15,742).
• The antidepressant Cymbalta cost four times more here than in England ($194 versus $46).
• Americans paid six times more than New Zealanders for the cancer drug Gleevec ($6,214 versus $989).
This might all make sense if Americans were getting higher-quality treatments or superior outcomes -- but we’re not. “The price variations bear no relation to health outcomes,” said Tom Sackville, IPHP’s chief executive. “They merely demonstrate the relative ability of providers to profiteer at the expense of patients.”
Other developed countries regulate medical costs, and most governments pay centrally for health care. As a result, they can force suppliers to negotiate fair prices. America’s free-market religion may foster more innovation, but it lets sellers set prices that buyers can’t refuse. (Congress has expressly barred the federal government from negotiating drug prices with manufacturers.)
“The rest of us benefit from your excessive spending,” added Sackville, who served as a UK health minister under Prime Minister John Major, “but it’s unsustainable for you to carry on this way."