• Why your stitches cost $1,500

    I’ve got a lot I want to blog about but not enough time to do it soon. Here’s a quick one. Check out this graphic from Medical Billing & Coding. There’s more.

    Why Your Stitches Cost $1,500 - Part One

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    • In the U.S. fraud accounts for and estimated 2% (or more) of medical costs, compared with 0.2% or less in the credit card industry. Defensive medicine and malpractice insurance accounts for 3-15% depending on the specialty. And Americans spend much of that per capita cost on aggressive end of life care in the ICU.

      The charges listed in the chart are not always what is paid by insurance companies, Rather, the $7.4K for medical care for having a baby is twice what Anthem pays in Virgina, but is what a citizen without insurance would be billed. The same goes for the CT scan, where the billing charge is not the negotiated fee that insurance pays.

      “In the Netherlands more than 40% of people are overweight, 10% are obese. The Netherlands seems to follow the trend in the USA at a distance of about 10 years. In the meantime the figures in the US show 56% overweight and 22.5% obesity.” This is not a problem with the system (it’s a lifestyle and cultural/behavioral problem), but also contributes to higher medical costs.

      Medical malpractice claims in the Netherlands are less than 10% of those in the U.S.

      Overall life expectancy in Netherlands in 79.8 and in the U.S. is 78.3. It just so happens that the Netherlands has the lowest premature birth rate and is among the lowest in infant mortality, which accounts for more than the difference in life expectancy.

      There are only 10 newborn intensive care units in all of the Netherlands. In severely ill newborns, 95% have care withdrawn, and 5% continue treatment until death. In the U.S., we withdraw care on only 40-50% of newborns. This accounts for a lot of medical costs. It is not so clear in all cases of premature birth who will have good outcomes and who will not, and this likely accounts for some of the discrepancy.

      Additionally, there is a relationship between distribution of doctors and use of services. For, instance, in North Carolina there are a lot of orthopedic surgeons and the number of spine surgeries per capita is higher in NC.

      The Netherlands has only 17 million people. 81% are ethnically and presumably genetically similar (by mitochondrial DNA analysis). The U.S. is much more heterogeneous and genetic factors likely play a role in disparate health problems and costs in a country that dwarfs the Netherlands in population..

      • There are only 10 newborn intensive care units in all of the Netherlands. In severely ill newborns, 95% have care withdrawn, and 5% continue treatment until death. In the U.S., we withdraw care on only 40-50% of newborns. This accounts for a lot of medical costs. It is not so clear in all cases of premature birth who will have good outcomes and who will not, and this likely accounts for some of the discrepancy.

        Fertility treatments in USA could also be a factor.

    • I assume that other countries have lower prices due to monopsony and or price controls (along with them being less wealthy) as a result of having socialized medicine. Still I have to ask could this be addressed on the supply side by making it much easier to become a doctor and allowing more care to be given by non doctors (perhaps still under a doctors supervision).

      Also It shows how corrupt our Government is that medicare and medicaid allow as much unhelpful care as they do and how much Medicare pays for care. Medicare and medicaid added together do not have Monopsony power but they are more than half of all spending couldn’t they squeeze providers much more than they do?

    • Medicare and Medicaid driving up medical costs? Are you kidding?

      Both programs have fee schedules that lag behind what private insurers pay, with Medicaid scraping the bottom of the federal budget barrel (which very likely has something to do with the fact that the Medicare population casts important votes around election time).

      If you read the news, family practitioners have been long complaining that they can’t afford to see Medicaid patients, and some have actually stopped (http://www.ama-assn.org/amednews/2011/05/09/gvsb0509.htm). And smart med students (and let’s face it, medical students are fairly smart people) are opting out of family practice in droves because it pays less, in terms of time, income, and quality of life after graduation (http://www.medscape.com/viewarticle/741496).

      The same pharma companies that develop and sell drugs here sell drugs for half the price (or less) overseas. And there may not be a nurse for every hospital bed in for-profit hospitals here in the US, but you can bet your bottom dollar that there’s a billing clerk for those beds, and you can thank insurance companies for that.

      I agree that we’ve got some problems with respect to how the government is handling the issues at this point. However, I think the evidence points more strongly at what the government is NOT doing – namely, getting over its squeamishness regarding putting the kabash on a for-profit industry that is raking the public over the economic coals for a service that is clearly not compulsory. When was the last time that you were taken to a hospital after an accident and informed of the total cost of treatment expected before services were given? Nobody is. And yet you can walk away from that hospital essentially owing them your house – or more. It’s ludicrous.

    • Wow, this infographic is informative. Makes me kind of sick. Cut our military spending and fix this problem.