Tuesday, February 26, 2013

Why are medical bills so high?

It's the subject of the current issue of Time Magazine. Americans are charged more for health care than citizens in any other country. The author tries to understand why. It seems our entire health care system is designed to jack up costs.

Andrew Sullivan points to other commentary that argues doctors in the US are overpaid. Doctors in the US insist on being paid high incomes, which restricts access to a large percentage of Americans.

. . . if Medicare expanded, “no doctor could hope for anything approaching the income he or she deserves (and that will make future doctors want to practice) if 100% of their patients yielded anything close to the low rates Medicare pays.” It’s true that many American doctors do believe that they would be crushed if they were paid only Medicare rates. They insist they’re hard-pressed as it is, barely getting by, and practically treat these Medicare cases as acts of charity. There’s no way they could swallow those reimbursement rates without the whole system collapsing.
But that’s not remotely true. The last time the OECD looked at this (PDF), they found that, adjusted for local purchasing power, America has the highest-paid general practitioners in the world. And our specialists make more than specialists in every other country except the Netherlands. What’s even more striking, as the Washington Post’s Sarah Kliff observed last week, these highly paid doctors don’t buy us more doctors’ visits. Canada has about 25 percent more doctors’ consultations per capita than we do, and the average rich country has 50 percent more. This doctor compensation gap is hardly the only issue in overpriced American health care—overpriced medical equipment, pharmaceuticals, prescription drugs, and administrative overhead are all problems—but it’s a huge deal.
Doctors aren’t as politically attractive a target as insurance companies, hospital administrators, or big pharma, but there’s no rational basis for leaving their interests unscathed when tackling unduly expensive medicine.