Procedures and Prices: Both Contribute to Health Care Spending Increases

For very good reason, there has been lots of attention on healthcare prices in the United States lately. We spend more on healthcare in this country than anywhere else in the world, and we also charge higher prices for the healthcare we offer. Physicians in the United States make much more than their counterparts elsewhere in the world. Pharmaceutical companies know that the US market is where they are going to make a good share of their profits, because they can’t charge the same high prices elsewhere that they do in the United States.
But keep in mind: we spend more on health care from year to year not just because of high prices, but also because we provide more healthcare services to more people. The relative contribution of prices and procedures is nicely summarized in this figure, reproduced from an article in the Annals of Internal Medicine:

If we want to get healthcare costs under control, we can’t focus on price alone.
(Click here to view comments)

Similar Posts

  • Here's How a Great Doctor Helps Her Patient Make a Cost-Conscious Treatment Decision

    Sometimes in my research on physician/patient communication, I come across a doctor who is so good with her patients, I have to share their bedside manner with you. The most recent example is a (to remain unnamed) oncologist in the Northeastern United States who practically gave a primer on shared decision making when caring for…

  • 150,000 Walt Disney Employees Denied Mental Health Coverage – A Headline from the Future

    Newswire Services, April 11, 2015: Breaking News


    Since purchasing the Walt Disney Company six months ago, the Church of Scientologyhas been slowly remaking that venerable institution, in an effort to promote their ambitious religious mission. In the pipeline are an unprecedented number of science fiction films and John Travolta/Tom Cruise buddy movies, changes that have been surprisingly popular among movie fans.
    But now the church is making a change that is not so popular. It has decided that Disney employees will no longer receive insurance coverage for psychiatric care or any medications used to treat mental illness: “Psychiatrists are the enemy of the people,” stated Church spokesperson Walter McGee. “The church opposes their brutal, inhumane treatments and refuses to pay for such services because they collide with our religious beliefs.”
    Many Disney employees are up in arms over this decision. But the church is unrelenting in its position: “If people want to receive devil-care, they can either pay their own money or find a job somewhere else,” said McGee.
    Critics blame the situation on a decision made by President Obama in February of 2012. Early that month, he had announced regulations that would require health insurance companies to cover contraception, with exceptions for churches that oppose birth control but not for larger church run organizations such as hospitals or universities. The Roman Catholic Church cried foul, claiming that their religious freedom was being violated. In response to pressure, the Obama administration quickly backed off on its policy, broadening the religious exception to any church owned business that was run as part of the church’s broader religious mission.
    That shift in policy opened an opportunity for religious organizations to carve a broader set of services out of their health insurance plans. The Jehovah’s Witnesses had gained ownership of Wal-Mart in late 2013, and soon employees of that company (at least the ones who get health insurance) no longer received coverage for blood transfusions. An Orthodox Jewish organization became majority owners of Ace Hardware in early 2014, and now employees of that company no longer receive insurance coverage for insulin products that are derived from pork.
    The Church of Scientology is undeterred by critics who claim that treatments like antipsychotic medications and antidepressants ought to be part of any basic health insurance plan. “America is the land of religious freedom,” he explains “a place where the government has no right to stand between a church and its employees.”
    Who could argue with that logic?

  • The Moral and Financial Case for Federalizing Medicaid

    Millions of U.S. citizens are too poor to buy health insurance but not poor enough to qualify for Medicaid.  And this “not poor enough” problem varies, state by state, depending on the generosity of local governments.  In some states, a person’s income can sit below the poverty level, and that person still won’t qualify for…

Leave a Reply