High prices and technology costs are driving health care costs sky high in the U.S., according to a new report from the Commonwealth Fund.
One major factor is the over-use of expensive testing, imaging and other technologies – compared to other countries like Norway, Japan and Germany, the report states.
The U.S. uses far more MRIs, CT scans, PET scans and mammograms than the aforementioned countries. What’s more, those tests are far more expensive in the U.S. than elsewhere. For example, an MRI costs about $1,080 in the U.S., versus $299 in France and $599 in Germany, the report reveals.
“This combination of pervasive medical technology and high prices showcases two potent drivers of U.S. health spending, and a possible explanation for the outsized share of resources we dedicate to health care relative to the rest of the world,” the authors say.
One item that isn’t driving healthcare costs, however, is higher use of services, the report says. The U.S. has the lowest physician visit rates (3.9 per capita), among the shortest hospital lengths of stay, and some of the lowest hospital discharge rates (per thousand) of the countries studied in the report.
“It is a common assumption that Americans get more healthcare services than people in other countries, but, in fact, we do not go to the doctor or the hospital as often,” report author David Squires says, according to Healthcare IT News. “The higher prices we pay for healthcare and perhaps our greater use of expensive technology are the more likely explanations for high health spending in the U.S.”
And despite using more expensive technology, and having higher prices for many services, the U.S. doesn’t necessarily have higher quality care, according to the report. The U.S. spent nearly $8,000 per person in 2009 on healthcare services, but other countries like Japan spend less than $2,500 per person, the report notes. The U.S. has top survival rates for breast and colorectal cancer, but also has the highest mortality rates for conditions such as asthma and diabetes. Also, mortality rates from heart attack and stroke aren’t any better than other countries studied.
Without price signals, consumers have little financial incentive to make sure they really need the new, more expensive treatments and technologies providers over. At the same time, hospitals have every incentive to over-use expensive medical equipment in order to recoup the investment they made when they bought it. It’s a perfect storm of financial incentives, new treatments and technologies, and induced demand.
Luckily, there’s a way out of this if we match the right kind of consumer-oriented reforms to emerging e-health technologies. By opening up the health care system to price signals at the same time that we integrate e-vists, 3D printing, and smartphone apps into our health care system, we can empower consumers and streamline the delivery of care.