Does the United States Have the Highest Medical Prices in the World?
It depends on where you buy your care. The International Federation of Health Plans — an international trade association for the health insurance industry — conducted a survey of health care prices across 25 countries and concluded: U.S. medical prices are the highest in the developed world.
For example, the total cost of a knee replacement in the United States 25th percentile price was about $16,500, while the average was nearly $26,000. By contrast, the comparable price in Switzerland was just under $12,000. Prices in New Zealand and Australia were about $15,000 and $22,000 respectively.
In the United States, however, patients can take advantage of MediBid, which facilitates competitive bidding among providers. (See our previous posts here and here). The average price for a knee replacement through MediBid last year was about $12,000 — similar to the cost in Switzerland and less than prices in South Africa, New Zealand and Australia.
MediBid looks like a great program. I would consider it for an major operation. I will bookmark this post and check back in three years. My expectation you ask? I expect average U.S. costs to rise by 23.4 percent to 41.7 percent from these statistics.
I don’t think anybody would disagree that prices in the U.S. are ridiculously priced, despite of how they compare or don’t compare to other countries’ prices.
Sad thing is that prices will most likely continue to rise in the U.S.
Alas, the American health system is destined for a not-so-gradual decline. Life expectancy might drop as people become sicker and unable to afford care 🙁
I disagree Anthony. I think in the long-run, the heath care system will improve. This is an old case of “things have to get worse before they get better.”
I agree with Patel. Eventually, costs will become so great under th PPACA that the mandate will fail. It might even fail before that. If we reach the cieling of people’s willingness to pay, change will inevitably occur 🙂
I disagree with Desai. Also it is important to note that the Medibid, you are limited by you option based on your location. Whereas in other developed nation, that price is the reflective average of the general, so location to location, it is not going to vary by much. Plus, when you need a service fast, you are not going to be looking for care ebay-style.
I think Sandeep brings up a good point. The way the health services are available is different. In the US, getting information about the price and having access to it near you is more fragmented than it is in other countries.
There’s no denying that many countries pay less for surgical procedures and drugs; many of them use bureaucratic price-controls and non-price rationing to contain health care expenditures.
One important fact to remember is that there isn’t just one price in the U.S. Rather, there’s thousands of prices for any given procedure. The same provider will likely have several different prices for each service they provide: one for Medicare, one for BlueCross, one for Aetna, and often two different cash prices (a “list” price for uninsured who don’t ask about price; a lower price for cash-paying customers who are willing to pay in advance).
Wide price variations are difficult to maintain in a system characterized by competition, where consumers decide which services to buy and which providers to avoid because they’re over-priced. The solution for the U.S. health care system isn’t to adopt the failed price-controls from other countries. Rather the solution is to inject the appropriate incentives for both providers and consumers with consumer driven health care.
There have been a ton of posts by John about the fact that prices for many of the services are completely fabricated. Vertically integrated markets with partial and ineffective federal intercession means that without a competitive market — those dollar amounts are meaningless. Sure people pay them, but if hospitals were actually forced to compete… well you can tell the ambulance drivers which hospital you want to go to.
Accepting data provided by certain countries can be unreliable. I’m hesitant to accept information from NGOs.
I thought Obamacare was supposed to bring down the costs of medical care. 🙁 guess not.
You have to be congratulated for finding the one comparable price on MediBid. Of course, the market share of MediBid is close to zero and if you ask them how many doctors they have signed up they won’t tell you. And there’s the issue of the quote vs the price. You must have never hired a contractor do any work on your house. We have the least government involvement in health care of any western democracy and the highest cost, that’ s not a coincidence.