CNN has a (sob) story about a man who was quoted $33,000 for a nasal surgery by U.S. doctors but was able to receive the same service in Wales at 1/10th the cost.
The following graphic shows pretty clearly how much skewed US costs are in comparison to the rest of the world:
Of course, the quality of healthcare in the US surpasses that of any other country, but nothing can justify such a huge premium. There are several explanations for these bloated prices:
- Torts – doctors are afraid to do their jobs lest some greedy money-grabber sues them for malpractice. Everything costs more because the doctor has to insure against such lawsuits.
- Unnecessary Certifications and Regulations – Everything in the U.S. is so specialized and over-regulated that it is mind-boggling. For instance, why does a hair dresser need a license and certification? I can cut hair better than most hair-dressers that have touched my mane and yet I need to pass an exam to work as a hair-dresser.
- Bloated Costs of Education – It costs at least $60-70 K per year for medical school. Anybody who pays $200-300k for a basic M.D. degree, plus more for specializations, can justify charging $170K for a heart operation.
- Profiteering by Hospitals and Insurers – Hospitals are private companies trying to maximize profits. You can never expect Microsoft to charge a reasonable price for its products. Microsoft sells its software for as much as is possible. Insurance companies also force providers to cut prices, for the sake of their own profits, and providers make up for those lost revenues by charging the un-insured an arm and a leg for their services.
- Shortage of Doctors and Providers – The U.S. is desperately short of doctors, yet well-qualified practitioners from other countries find it almost impossible to be certified in this country (see the last post as an example).
- Lack of Insurance Options for the Poor – The most likely option for the vast majority of the poor and uninsured is to visit the ER when the situation is critical. This raises health care costs for obvious reasons.
- Myriad Regulatory Bodies – In addition to the federal government, every state and most cities maintain their own set of regulations pertaining to health care.
The story was presented to justify Obamacare – an overt CNN advertisement in support of nationalizing our health care system.
But the solution to the problem is not the colossal Obamacare program, but targeted laws and regulations eliminating some of these problems.
