• Why your stitches cost $1,500, part II

    Part I is here. All courtesy of Medical Billing & Coding. Both this and the first graphic draw heavily from this blog’s content, as described in the sources fine print.

    Why Your Stitches Cost $1,500 - Part Two
    Via: Medical Billing And Coding

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    • RE: Medication is “118% more expensive” because the government is “less involved”

      The recent example of Makena demonstrates how government involvement can drive up drug prices.

      Don’t supply restrictions through patents etc. count as government involvement?

    • I really get annoyed with overly simplistic statistics like some of those. It’s possible that more rigorous analysis wouldn’t change the results, but let’s find out!

      re: alcohol consumption per capita – France is the highest, unsurprisingly. The French drink a lot of wine, many French people every day. But having a glass or two of wine every day is not harmful to your health, in fact there’s evidence it can actually improve your health when consumed in moderation. A French person who drinks a moderate amount of wine daily drinks more overall than an American who binges on the weekends, but all else equal we wouldn’t expect poorer health outcomes or higher health care spending for the French person. This aggregate statistic doesn’t really tell us much about drinking habits and health care spending.

      re: percentage of daily smokers – How much does daily smoking contribute to current health care costs? Wouldn’t it be more helpful to track smoking rates over time? Seems to me you’d have a 20-30 year lag on the contribution of smoking to health care spending. Maybe the US was the lowest 20-30 years ago as well, but the current rates don’t do us much good here.

      I’m all for coming up with simple and graphical ways to explain health care issues to the general public, but I’d like those explanations to be useful.

      • And why compare just the elderly percentages? Why not compare the percent of total health care expenditures spent on the elderly (or normalize by percent of HCE per percent elderly)?

    • Evidently smoking saves money because lung caner and heart disease kill quickly. As for life expectancy It is more important how many people where smoking 30 to 40 years ago than who is smoking now.

      The fact that Doctors are over paid is a regulatory problem, that is, it is too difficult to license to practice medicine here in the USA.

    • How about the affects of homicide and accidents, I do not know if they affect costs positively or negatively but they do have an effect on longevity statistics.

    • If it is that prices are too high in the USA why is so little of the debate about how to drive down prices, like through modifying regulation of who can do what and thinking of ways to drive down equipment and med costs? Price controls would be one method but I would like to avoid that.

      • It seems to me that regulations often come about in order to determine who is insurable and who is not. Those regs are often written by the insurance industry (and approved by congress) and are, therefore, written in a manner that will result in maximizing profitability for the insurance company (ie, risk reduction). The more I think about many aspects of our lives and the associated costs, the more it occurs to me that the insurance industry has a, if not THE, major influence.

    • This needs to be better executed. It says we have the lowest percentage population of elderly, but 13% of 350 million is a lot more than 15% of 60 million. The USoA almost has as many elderly people as the UK has people period.

    • The medication question is one that I’ve had for a while.

      So, we pay 2.18 times what other countries do. The average reported pharma profit margin is 20-25%. What percentage of the drug market is the US?

      If you were to push the US drug prices down to the OECD (or whatever countries the infographic is including) average, what would the profit margin of pharma be? Would they be in the red?

    • I think they’ve got inpatient and outpatient confused? Outpatient care is cheaper than inpatient care, and is generally a more efficient way of doing things, but requires a primary care infrastructure that the US doesn’t have.

    • The information in this note is a mix of good and bad. The first two (alcohol/tobacco and size of the elderly population) are great, but miss important parts of the equation. The equation on the first is overall behaviors–we may do well on alcohol and tobacco, but what about obesity/lifestyle (wait for it), accidents and violence, and other health behaviors? The equation on the second focuses solely on the size of the elderly, not on other important relevant issues, like how we handle long-term and end of life care.

      The third chart is just laughably wrong or just very badly interpreted. The CDC estimated the medical costs of obesity to be $147 billion in 2006, and it’s certainly higher today. While lifestyle does not begin to explain all the differences in costs, it is certainly part of the explanation.

      The malpractice chart is accurate, but the administrative one is incredibly difficult to consider. Most estimates come nowhere close to doing a good job figuring out how to handle the comparative costs of collecting taxes versus private premiums, for example. While I think everyone suspects higher administrative costs in the US, putting a solid number on it is challenging.

      The “massive outpatient costs” one is another head scratcher. Inpatient treatment is much more expensive on a per patient basis. Higher costs associated with outpatient care result from more people getting the service (which may or may not be a good thing), because of its lower costs, greater convenience, and (in some cases) payment advantages for providers. So, some of this represents practice patterns, which includes many benefits, as well as costs.

      And, finally, yes prices are higher. Much higher. The chart doesn’t even mention other differences in practice patterns, which is a significant component. How much of the price and practices differences represents provider leveraging monopoly profits, poor quality care, or better quality of care is the multi-billion dollar questions.

    • That graphic is circular and is very sad execution.

      For example, Docs being paid higher is related to overall higher healthcare costs. It is hardly independent. The money has to go somewhere.

      Another error, outpatient spending is going up but the draw is that outpatient settings are CHEAPER in overhead than Inpatient. I think the data needs to be drilled down more because ASCs are paid 58% of a hospital outpatient department. Flat-lining lining Inpatient costs could be connected to the heavy use of outpatient setting (although the market is now mature).

      Another error, it assumes that the government being involved decreases costs. Can you say “bias”?