sethnintendo said:
I have dental and vision plans under my employer due to seeing actual savings with those plans. Dental cost about 7 a week for me while vision is around 1 dollar a week. These plans offer decent benefits. However, going to their health plans the deductibles are high, the coverage is weak, etc.. I see no value in holding one of those health plans considering it would probably be less money if I just paid out of pocket if I really needed medical help then paying 35+ a week for a terrible health plan. |
Just because the US has a private system does not mean that there aren't significant cost considerations that increase the price of doing (medical) business in the US. Sam R Smith went over a bit of it, and I'll go over more. I worked in health care a little bit, so I did see a few things myself that made business very expensive. Otherwise, here are some other issues with the system:
1. Medicare / Medicaid ties prices to specific levels. Doctors and hospitals are 'forced' to charge specific prices for given services. Does it really cost $5,000 for an MRI? Doesn't matter. That's what Medicare/Caid will pay out. Therefore, prices tend to be tied not to the cost of doing business, but whatever the government will pay out. If you really shop around for services, you will find huge differences in price. But since most hospitals have no incentive to compete, they don't, yielding higher prices.
2. Medicare / Medicaid Compliance Costs. This was the big one for me. When I worked as a medical transport officer, our company billed Mediciad for $80 per transport (1st mile) and $4 per mile thereafter for medicare. Why so much? Compliance. That first mile required about 15 minutes of paperwork on my end + double that or more for billing at our company. These compliance costs were ones I knew of that drove up costs for such a very simple service. Throw on other compliance costs and regulations, and its very restrictive to work in the medical field in the US.
3. AMA's Cartel on Employment. Its very simple. The AMA decides who can be a doctor in the US. More or less, its a cartel. They decide everything in regards to employment for doctors in the country. Because of that, the US requirements for doctors are notoriously high when compared to every other country on earth. It requires a doctorate (8+ years) plus no less than 4 years of residency. That means 12 years of schooling at an AMA-backed college which usually means $20,000 per year. The burden here is twofold: Doctors come into practices burdened in debt, and there is not a great supply of American doctors. That is the major reason why you see so many Chinese and Indians here. Its much easier to import a doctor than train one here. At any rate, this drives up the cost considerably on paying doctors. In Japan, the average doctor makes about $70,000/yr as they require 6 years of training. Alternatively, the average doctor makes >$150,000 here. Those costs are added to your care.
4. FDA's Regulation of Goods. America has one of the most stringent standards in regards to drugs and vaccines. Because of this, pharmacutical companies have to pay incredible prices to get drugs on the market. That is why prices are so incredible in the US - they have to spend billions in R&D and testing, which requires them to recoup costs. Why doesn't Europe or Canada have these insane prices? Lets ask this: When was the last time you saw a pharmacutical company field a brand new drug there? They don't. They are secondary markets. If the FDA wasn't as stringent, you'd see lower R&D costs and lower overall costs to field new drugs.
5. Lack of Competition. Just like hospitals, there is unfair or poor competition for insurances and healthcare in the US, period. We have insane laws that don't allow insurance companies to compete across state lines. Additionally, like Samuel said, businesses get big tax breaks on insurances which stacks the deck, preventing individuals from getting care. Lack of competition invariably drives up costs as insurance companies not only cannot compete, but must field redundant offices in every state, driving up the cost of business.
6. Other Regulatory Issues. I can't go into every issue, but the government has very stringent laws on health care in the US. You have many well-meaning policies in the US that require a lot of time and money to comply with. Some estimates (from places such as CATO) put health care compliance costs at between 40 and 60% of the total cost of health care in the US (which includes possible areas of points #1 through #5).
America does have a totally free-market health care system. No FDA. No AMA. No medicare/medicaid system. In that free market, insurances don't exist because care is cheap, and so are the drugs and pills. I've been mentioning this for a long time and no one has bothered calling me out. You can get MRIs and major surgeries for less money than a day in the hospital costs. Do you know what it is? Its call a veterinary clinic. They have no rules, yet pets are no more likely to die due to the vet or its medicine than a human is, despite costs being considerably less.
Back from the dead, I'm afraid.
