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It's not. There's a good breakdown that compares what drives healthcare spending between the US vs Germany (and others). https://www.healthsystemtracker.org/br

• aaronblohowiak 6y ago
  >raw cost of inpatient and outpatient care I am interested to understand what makes the "raw" costs so wildly different. When my son had an infection in germany, we went to the equivalent of pediatric urgent care and after seeing the nurse, having bloodwork done and a few different 15 minute sessions with the physician we came to the end of the visit with the doctor, they apologized that we had to be charged the full uninsured rate and that a bill would be given to us later that we could use to have our insurance (they could not bill our insurance internationally.) We paid the 50 euros and asked what the total amount would be, assuming that was the co-pay. There was a lot of confusion because the 50 euro wasn't the copay -- it was the full-freight amount. Getting a single 15 minutes with a doctor, let alone the prep with the nurses and bloodwork being rushed would be far more than that in USA.
  • mschuster91 6y ago
    > I am interested to understand what makes the "raw" costs so wildly different. In the US, hospitals lose a lot of money on patients who don't pay at all or pay pennies, and in order to not make a loss at the end of the year they charge those who can pay more money. Also, insurances have an incentive in having hospitals set high "sticker prices" because then they can claim "higher savings" for their members. Contrast to that, in Germany as long as a patient has any insurance (and 99.9999% of Germans do) the hospitals and doctors will get their services paid (so no need to overcharge for financial reasons), and both the mandatory insurance scheme and the private insurance companies pay fixed, government-regulated fees (https://de.wikipedia.org/wiki/Einheitlicher_Bewertungsma%C3%9Fstab https://de.wikipedia.org/wiki/Einheitlicher_Bewertungsma%C3%... for the government insurance, https://de.wikipedia.org/wiki/Geb%C3%BChrenordnung_f%C3%BCr_%C3%84rzte https://de.wikipedia.org/wiki/Geb%C3%BChrenordnung_f%C3%BCr_... for the private insurance system).
    • maxerickson 6y ago
      Uncompensated care (includes unpaid and forgiven charges) is in the ballpark of 5% of costs, according to hospitals themselves.
  • bhupy 6y ago
    > I am interested to understand what makes the "raw" costs so wildly different. There are a number of reasons. One big one is simply that doctors in the US command a much higher salary than their counterparts elsewhere in the world: https://economix.blogs.nytimes.com/2009/07/15/how-much-do-doctors-in-other-countries-make/ https://economix.blogs.nytimes.com/2009/07/15/how-much-do-do... https://www.politico.com/agenda/story/2017/10/25/doctors-salaries-pay-disparities-000557/ https://www.politico.com/agenda/story/2017/10/25/doctors-sal... Another big reason is that the US is unique in that it's one of the only countries in the world where you get your healthcare through your employer. What we're seeing in healthcare costs is analogous to what you might see happen to airline ticket costs if we all got our air tickets through our employers: the vast majority of us would fly business class, while the unemployed would be simply unable to pay for business class fares out of pocket. Employers (especially medium-to-large businesses) have a much higher purchasing power (and hence, willingness to pay) than individuals. Now, if you take this behavior and combine it with the fact that health insurers' profit margins are capped by law by percentage, insurers pay more for treatments (which doctors happily accept), charge more to employers (who are generally less price conscious vs individuals), thus bring in more absolute revenue, and therefore more profit because a capped profit percentage of a higher revenue is higher than a capped percentage of lower revenue. It's somewhat counter-intuitive, but the policy combination of an employer mandate and insurance profit cap results in the mother of all local optima. Disclaimer: I work on health pricing in the US and sometimes adjust claims myself.
    • pvaldes 6y ago
      > doctors in the US command a much higher salary than their counterparts elsewhere in the world Yes, but salaries are also linked to huge debts to pay in their first years, a permanent state of fear to be sued by negligence (losing their license and seeing their only possibility of income vanished). It seems that suicide and depression are too common among young students. They also work too many hours in irregular schedules (working in sundays, holidays or passing one on each three weekends at the hospital is not uncommon. This will add a lot of stress for parents with small children trying to having a normal life. And is a emotionally charged work. ... So either you provide a particularly high reward in form of a golden salary, or perhaps nobody would wanted to be a doctor.
  • SilasX 6y ago
    That's what I find so depressingly hilarious about the US vs the rest of the developed world [1]: that even when they super-apologetically hit you with the full, no-mercy price, it's less than what you'd way with (already overpriced) insurance in the US. [1] Well, also developing, but super-low prices aren't as surprising or embarrassing to the US in that case.
  • whiddershins 6y ago
    If you think about it, you just weren’t actually charged for what you used. If what you did were reflective of the doctor’s hourly rate, that doctor would be making around $150,000 usd/year. And that’s ignoring the costs of every other aspect of the overhead. The cost is being born some other way.
• Sprbdg 6y ago
  How can that possibly be true? How can in/out patient care be so vastly different in cost?
  • treeman79 6y ago
    Middle men. Lots and lots of middlemen.
    • bhupy 6y ago
      That figure cuts out the middle-men by breaking out administrative costs.
• therealdrag0 6y ago
  Do they ever try to break down why IO care is more expensive? Cuz that’s a very broad and vague bucket.
• giorgosera 6y ago
  > The vast majority of the difference comes from just the raw cost of inpatient and outpatient care. Question: What do we mean by "inpatient and outpatient care"?
  • bhupy 6y ago
    Inpatient care refers to any treatment where the patient is required to be admitted to a hospital or health care facility facility. On the other hand, the OECD defines outpatient care as care that "comprises medical and ancillary services delivered to a patient who is not formally admitted to a facility and does not stay overnight." Thus, studies like this try to break out "inpatient and outpatient care" as an attempt to represent the "real" service in question, while isolating things like administrative costs.
  • roganp 6y ago
    Inpatient: services provided by a hospital, after patient is admitted. Outpatient: services provided in other settings
  • pkaye 6y ago
    I think outpatient care mean you don't stay in the hospital overnight. So you could have a surgery and leave within an hour in the recovery area and that is outpatient.
• dalbasal 6y ago
  What does "raw" mean, in this circumstance? Looking at the article, it's pretty hard to understand what what's actually costing more. "Inpatient and outpatient care" is a pretty enormous bucket and probably accounts for a whole lot of salaries, services, and such of pretty much any job title with "medical" in it. Admin, does in fact represent the largest % difference... but it's not clear what's grouped into it. I assume it means government departments, insurance firms, external legal/finance services. I don't think the data refers to a salary-bysalary breakdown of costs. Sometimes it's best to look at these things from the ground up. Doctors, nurses. How many? How much are they paid? Is the diff more or less than mean diff? If no, move on, If yes, dig deeper. You really can't even rely on price data to tell you much. Most of these markets have a broken or absent price system. The underlying answer though, inevitably will likely be "because they're run differently."
• mancerayder 6y ago
  This is useful - as a starting point. I want to be able to make a case for a single payer system in the U.S., but I think to be effective it's a comparison of costs and outcomes that needs to be had. In the data linked above, we're told that the 'inpatient and outpatient care' is significantly higher than in 'comparable countries.' I believe it. But isn't 'inpatient and outpatient care' just about .. everything that goes into a health care system aside from the paper pushing and insurance pieces? And are hospitals really breaking that stuff out ? Someone in favor of the U.S. system would say, ah hah, that's because we in the U.S. have access to better care, and more sophisticated technology, than in France or Germany, and also we don't have long waiting lists. I don't know the technology claim, but I've seen the wait list claim and I do think it's true when comparing the U.S. with Canada or the UK (the latter two have long waits for essential surgeries compared to the U.S.) How would one counter this claim?
  • bhupy 6y ago
    You're right that it's a useful starting point, but I think that it's even more complicated than "single payer is better". First of all, it isn't obvious that single payer is the best system, because there are many countries in the world that have exemplary health care systems that are not "single payer". You cited Germany as an example, but Germany doesn't have a single payer system, it has a public-private mix. It's a universal multi-payer system. Netherlands has a purely private universal healthcare system, Switzerland has a purely private universal healthcare system, Australia has a public-private mix (44% choose private), Singapore has universal catastrophic coverage but everything else is driven by savings accounts and private insurance among the upper-middle class, etc etc — Belgium, South Korea (technically "single payer" but only covers 60% of costs, private insurance fills in the gaps), Japan, etc. From where I sit, the most apples-to-apples A/B test of single-public-payer vs private insurance is actually being run in the US, as we speak. When you turn 65, you have the option to enroll either in "Original Medicare", which is what we usually think of when we talk about "single payer healthcare in America", or you can enroll in Medicare Advantage (aka Medicare "Part C"), where the premiums that would go to the CMS instead go to private insurers like Humana, United, Oscar Health, Aetna, Clover, etc. These plans replace Original Medicare, also cover Part D prescription drug benefits, and often include supplemental benefits that Original Medicare doesn't already cover. There are some interesting findings so far: - 39% of Medicare beneficiaries are on private Medicare Advantage plans instead of the public "Original Medicare". Because everyone is entitled to "Original Medicare", this is purely voluntary. This number has been growing so rapidly, that we expect by 2025, more seniors to be on a private plan than the public one. There's also great variance by State. In Florida, Pennsylvania, Wisconsin, Michigan, Minnesota, Oregon, Alabama, Hawaii, and Connecticut — nearly 50% of beneficiaries are on Medicare Advantage. By 2022, we expect more seniors in those States to be on a private plan than a public one. https://www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage-in-2020/ https://www.kff.org/medicare/issue-brief/a-dozen-facts-about... - For most beneficiaries, Medicare Advantage costs about 39% less than Original Medicare. https://healthpayerintelligence.com/news/medicare-advantage-costs-40-less-than-fee-for-service-medicare https://healthpayerintelligence.com/news/medicare-advantage-... - Medicare Advantage plans are, on average, of higher quality than the public "Original Medicare" https://healthpayerintelligence.com/news/medicare-advantage-enrollment-quality-continue-upward-trend https://healthpayerintelligence.com/news/medicare-advantage-... - In Urban areas, Medicare Advantage costs less per capita to administer than Medicare — and that's not including the extra Medicare Part D insurance that you would have to buy if you're on the Original Medicare plan. https://www.commonwealthfund.org/publications/issue-briefs/2016/jan/does-medicare-advantage-cost-less-traditional-medicare https://www.commonwealthfund.org/publications/issue-briefs/2... From this same research, public "Original Medicare" is still cheaper in rural areas, but not by a whole lot. So to make things more complicated, we're not just talking about whether "Medicare For All" is better than the status quo, we also need to litigate if private-insurance driven "Medicare Advantage For All", is even better.
• arppacket 6y ago
  The "administrative costs" in that analysis are misleading. "Administrative costs include spending on running governmental health programs and overhead from insurers but exclude administrative expenditures from healthcare providers." I don't think the blue bar is representative of the "raw cost" of care. This study says over one-third of all US healthcare costs are administrative. https://www.reuters.com/article/us-health-costs-administration-idUSKBN1Z5261 https://www.reuters.com/article/us-health-costs-administrati...