U.S. Health Costs vs. The World: Is It Still The Prices, and Are We Still Stupid?

2012 Cost Per Hospital Day Global IFHPComparing health care prices in the U.S. with those in other developed countries is an exercise in sticker shock.

The cost of a hospital day in the U.S. was, on average, $4,287 in 2012. It was $853 in France, a nation often lauded for its excellent health system and patient outcomes but with a health system that’s financially strapped.

A routine office visit to a doctor cost an average of $95 in the U.S. in 2012. The same visit was priced at $30 in Canada and $30 in France, as well.

A hip replacement cost $40,364 on average in the U.S. in 2012. The total hospital and physician cost for a hip replacement in the UK was $11,889 and in France, $10,927.

An MRI cost $1,121 in 2012 in the U.S. In the UK, and MRI was $335 and in Switzerland, $928.

These numbers were gathered by the International Federation of Health Plans 2012 Comparative Price Report. The IFHP is a global association of health insurance organizations with over 100 members in 25 countries from around the world. U.S. members include Aetna, AHIP, Blue Cross & Blue Shield Association, Emblem Foundation Health Plan, Kaiser Foundation Health Plan, RW2 Enterprise, The Trizetto Group, Tufts Health Plan, and UnitedHealth Group. U.S. data in this study are based on over 100 million patient claims.

It’s very difficult to compare prices for health care across country lines: health systems organization and financing vary, with some countries adopting single payer systems and others with mixed public/private systems.

However, even with the methodological challenges of these kinds of studies, the sheer vast chasm between U.S. prices and those in other nations is worth noting. Even if these variations are off by a factor of 100%, the U.S. is still King of the Hill in health pricing with the exception of a handful of areas.

It’s important to recognize that for some U.S. providers in certain clinical areas, the lowest 25th percentile of costs are on-par with the most expensive countries in the study. For example, the cost of a hospital day in the U.S. was $1,514 for the 25th percentile compared with $1,472 in Australia and $853 in France.

The variation in prices on prescription drugs is also notable, if non-uniform: while American Rx prices are universally higher than those in other countries for the same medication, some are as much as four times greater comparing the U.S. and Canada. For example, Nasonex (for nasal allergies) was $108 in the U.S. in 2012 on average, $29 in Canada, and $12 in the UK. Cymbalta (for depression, anxiety. and fibromyalgia) was $176 in the U.S., but $113 in Canada (so about two-thirds of the U.S. price), and $48 in the UK. Celebrex, prescribed for pain, was on average $162 in the U.S., $53 in Canada, but a relatively high $116 in the UK. Transparency on prescription drug prices for Medicare enrollees is what prompted the call for prescription drug importation from Canada.

Health Populi’s Hot Points:  One of the most striking data points in this report is the 2012 total hospital and physician cost for hip replacement, as well as the cost for a hip prosthesis. For the total cost of hip replacement, the U.S. average was $40K versus $28K in Australia, $12K in the UK, and $11K in France. For the hip prosthetic device itself, the cost was $12,222 on average, versus $10,863 in Australia and $2,682 in Spain.

As the U.S. population continues to age, so will the nation’s hips and knees. This one clinical area merits scrutiny as a cost center for aging American taxpayers, and a revenue center for providers. There’s a strong case for a bundled payment here, along with measuring patient outcomes and paying for value.

For those Health Populi readers keen on this issue, the landmark article on this topic was Uwe Reinhardt’s It’s the Prices, Stupid: Why the United States is So Different from Other Countries, published in the May 2003 Health Affairs. Ten years later, it’s the same old story; you decide the stupidity of the situation. But ten years feels like a very long time to be wrestling with the same old questions.

4 Responses to U.S. Health Costs vs. The World: Is It Still The Prices, and Are We Still Stupid?

  1. Robert C. Bowman, M.D. April 3, 2013 at 5:07 pm #

    In Japan the average primary care patient that I observed spent 5 – 10 min waiting, 10 min with the doctor and nurse (together with computer), 10 – 20 min doing any blood work or other testing if needed including local x-rays or ultrasound, and 10 min at the next door pharmacy. And this was a rural area.

    The patient had a 30% co-pay. There is a smart card with health info. The design favors office based practice and shorts academic, hospital, and subspecialty where there are longer lines.

    But since the bulk of visits are office visits there is an enormous savings of people productivity and this applies to the health personnel as well.

    You may have had only 10 min, but you had two health professionals working efficiently and effectively just for you. And the primary care nurse that you rarely see in US primary care (because they are begging insurance companies for care or multiple sites for fragmented information), is working mainly to get care rather than facilitate better care. What a waste of the largest primary care workforce of 250,000 primary care RNs who should be free to facilitate better health before, during, and after encounters rather than working for someone other than the patient – by the corrupt US design.


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