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No matter what way you slice it, health care in America is complicated…and expensive. If you are one of the lucky ones who has great health care coverage, thank your lucky stars. If you have minimal insurance or no coverage at all, things can get very pricey real fast.
And for those of you hearing the constant cry of “America has the best health care in the world!”, listen up. Here’s how it really works and here’s why a trip to the hospital is so damn expensive (for most of us).
The U.S. spends more money each year per person on health care than any other developed nation in the world. The reason? American hospitals overcharge patients in a HUGE way. Even though Americans use doctors less than in other countries (despite the popular narrative that we go much too often), we still pay more for our health care. Aside from a few very specific examples, the highest prices for medical treatment are found in the United States.
Photo Credit: Pixabay
The truth is, health care in America used to be affordable, but the rise of big insurance companies changed all that. Each hospital has what is known as a Chargemaster, a list of all billable items and services that determines how much someone’s insurance company (or the people themselves) is billed for after services. The Chargemaster is comprehensive and contains prices for services, drugs, supplies, tests, etc.
Hospitals used to determine prices by taking into account health care costs and figuring out how profits could be put back into their facilities. But over the years, hospitals began raising prices to anticipate negotiating discounts with private health insurance companies, all while turning a profit. The prices have continued to skyrocket, and there is really no justification for it. A former health care company executive said, “Over the years, the charge masters have become more and more disconnected from reality.” And hospitals try to make up for their losses by charging full price to many self-pay patients, usually those without health coverage.
And each hospital has their own individual Chargemaster, so what might cost $7,000 at one hospital might cost $100,000 at another facility. One glaring example: if a patient goes to the Bayonne Hospital Center in New Jersey to receive treatment for the respiratory disease COPD, they can expect to be slapped with a bill for $99,690. Less than 30 miles away at the Lincoln Medical and Mental Health Center in the Bronx, the same treatment costs $7,044. And it seems like there is no rhyme or reason for the differences in costs. It all boils down to an incoherent system. Here is a graphic that illustrates the radical price differences for the same procedure in the same area.
Photo Credit: Health and Human Services
The best health care in the world, right?
And even if you’re covered, you might feel the burn when you pay your premium each month (and it gets raised), since insurance companies have to profit from the entire, convoluted system. You might ask yourself how this is allowed to happen in America. The answer is simple: it comes down to lobbying. The health care lobby in the U.S. spends more than the oil and defense lobbies COMBINED. That shows you how much power the health care system has. And insurance companies continue to raise premiums and deductibles every year.
While the lobbies are obviously trying to make as much money for insurance companies in the U.S., many other countries have agencies that negotiate lower prices with hospitals and drug companies. The U.S. has no such agency, and every single insurance plan negotiates with doctors, hospitals, and drug companies to set prices. So insurance companies don’t end up getting bulk discounts, and Americans are stuck with higher bills. And that’s for the people with insurance. At the end of 2016, there were nearly 28 million nonelderly Americans who didn’t have health insurance (down from 44 million in 2013). One particularly distressing case was a 1-year-old who went to an emergency room for a cut finger. The bill came out to $629: $7 for a Band-Aid and $622 for the facility fee. On top of the exorbitant fees is the reality of most Americans’ financial situations: 63% don’t have enough savings to cover a $500 emergency.
The numbers don’t lie: we pay way more money for medications and treatments in the U.S. than in other countries. Here are some examples that will most likely infuriate you:
Photo Credit: International Federation of Health Plans
Photo Credit: International Federation of Health Plans
Photo Credit: International Federation of Health Plans
Photo Credit: International Federation of Health Plans
The sad truth is that until insurance companies decide to change their policies and completely upend the health care system in this country, we all have to grin and bear it. So here’s to staying healthy and avoiding the hospital/emergency room/clinic at all costs!
