Case Studies

Higher prices to blame for cost of 0.5. healthcare: study By Michael Romano / July 12, 2005

Why do Americans pay more for healthcare than citizens of other countries? It may sound like a punch line to an unfunny joke. but the answer is... because prices are higher. That’s the basic conclusion of a study in the July/August issue of the journal Health Affairs. which found that the high costs of healthcare in America are due to the high costs of eyerything from prescription drugs and hospital stays to doctors visits and diagnostic tests. In a survey of 30 nations using figures from 2002. researchers found that the US. spent $5,267 per capita for healthcare - or $1,821 more than the next-biggest spender. Switzerland. In all. the U.S.’ per capita spending was about 140% higher than the median for the other countries surveyed. The study also found no evidence that the US. spends more for healthcare because residents enjoy access to more services. Healthcare spending accounted for 14.6% of the US. gross domestic product in 2002. Only two other countries - Germany and Switzerland - spent more than 10% of their GDP on healthcare that year. “There is a popular misconception that we pay much more for healthcare in the US. compared to European and other industrialized countries because malpractice claims drive up costs and there are waiting lists in most other countries.” said lead author Gerard Anderson. a professor in the department of health policy and management at the Johns Hopkins Bloomberg School of Public Health. “But what we have found is that we pay more for healthcare for the simple reason that prices for health services are significantly higher in the US. than they are elsewhere.” Malpractice awards. long blamed for high healthcare costs. amounted to only $16 per capita in 2001. compared to $12 in the United Kingdom and $10 in Australia. the study said. And so-called “defensiye medicine” by doctors isn’t much of a culprit, either, according to researchers. Even the highest estimate of the costs of defensive medicine puts it at about 9%, a small portion of the 140% spending differential.
The Seattle Times: The Hidden Big Business Behind Your Doctor’s Diagnosis

Suddenly Sick (June 26-June 30, 2005)

“Every time the boundary of a disease is expanded - the hypertension threshold is lowered by 10 blood-pressure points, the guideline for obesity is lowered by 5 pounds - the market for drugs expands by millions of consumers and billions of dollars. The result? Skyrocketing sales of prescription drugs. Soaring health-care costs. Escalating patient anxiety. Worst of all, millions of people taking drugs that may carry a greater risk than the underlying condition. The treatment, in fact, may make them sick or even kill them.”