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*Where* is US health care so darn expensive?

Discussion in 'Off-Topic' started by Integral, Mar 28, 2012.

  1. Integral

    Integral Can't you hear it?

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    So we know that the US pays way too much for healthcare, and we all have ideas about how to fix it. This is a post about the distribution of that healthcare spending.

    Are we spending too much on inpatient care? Outpatient care? Maybe it's all about administration and paperwork, and if we just cut out the middlemen we could slice out the extra costs. Maybe we're too damn fat, or we practice defensive medicine more than other countries. Maybe we coddle doctors and pay them too much.

    McKinsey and Company have broken down US spending into these (and more) categories. Here are two key pictures:

    You'd expect the US to be on the line, if we were spending in the same way that other countries are. Above the line means you're spending more than we'd expect, below the line that you're spending less than we'd expect, for your national income.



    Let's break this down a bit.
    0. "Remaining health care spending" in the graph (the biggest portion) is just the amount we would be spending if we were on the line.
    1. The US pays about 50% more than it would be expected to. Specifically, we're paying $7000 per person, but based on our wealth and the average payment across other countries, we ought to be spending closer to $5000.
    2. The largest single area of "overspending" is in outpatient care.
    3. None of the red herrings matter a whole lot. We pay doctors more, and that leads to increased costs, but not by much.
    4. We actually overspend by a ton on administration and insurance, but those are relatively small pieces of a much bigger picture. Cutting admin expenditures in half wouldn't do much to that big picture.

    This basically maps out a landscape of where reform needs to happen. Outpatient care is extremely expensive in the US, and reforming outpatient care would be a massive step in the right direction. We spend a bit more than we should on drugs, and on administration. We can't really blame being fatter than other countries, or paying doctors more, except perhaps in combination.

    So many pretty charts about the healthcare spending situation.

    "higher than expected", specifically, means higher than one would expect a country with our income level to spend, using the OECD countries to figure out the relationship between wealth and health care spending.
     
  2. Antilogic

    Antilogic --

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    Subscribing for future reference.

    I've done a little bit of poking around on your link, but I can't find any further specific breakdowns on the outpatient care category. They explicitly mention emergency services here, as well as several types of surgery that are done as outpatient operations in the US that are inpatient in other countries. However, you would expect to see inpatient care to be lower than the expected curve if it was simply a matter of classification of surgeries, which we don't see above.
     
  3. caketastydelish

    caketastydelish Deity

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    I say America should do whatever Poland is doing, based on that graph. Winner or others, any advice?
     
  4. Ayatollah So

    Ayatollah So the spoof'll set you free

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    1: ditto; 2: Ding ding ding ding!!

    Which means we need to look at inpatient+outpatient total, because the breakdown among the two is not helpful for the comparison.

    What, being poor? Try Finland instead.
     
  5. Arwon

    Arwon

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    Earn income around 1/3rd of current per capita income?
     
  6. caketastydelish

    caketastydelish Deity

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    I meant they spend far less on health care than Americans. I thought Poland was perhaps the most cost effective, but maybe I am wrong.
     
  7. Arwon

    Arwon

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    You are, the graph is comparing spending per capita to total GDP per capita. The line represents the expected relationship between those two things. Poland spends less money because it has less money and also because wages and some other costs are lower.
     
  8. caketastydelish

    caketastydelish Deity

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    In that case, Finland is the way to go.
     
  9. Defiant47

    Defiant47 Peace Sentinel

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    Can someone please define "outpatient care" in layman's terms? Thanks.
     
  10. Cutlass

    Cutlass The Man Who Wasn't There.

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    Japan's pretty effective on cost-benefit.
     
  11. MagisterCultuum

    MagisterCultuum Great Sage

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    "Outpatient care describes medical care or treatment that does not require an overnight stay in a hospital or medical facility. Outpatient care may be administered in a medical office or a hospital, but most commonly, it is provided in a medical office or outpatient surgery center."
     
  12. Defiant47

    Defiant47 Peace Sentinel

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    Yeah, I read the wikipedia page for it, but it's still not clear enough. Maybe I'm just obtuse.

    Is it literally whether you stay in the hospital or not, regardless of procedure? "Surgery on kidney" can go into either inpatient or outpatient depending on whether you stay in the hospital?

    It still doesn't make sense to me.
     
  13. Cutlass

    Cutlass The Man Who Wasn't There.

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    That's basically right. If you go see the doc, get something done, and then go home, it's outpatient. If you go and stay a night in the hospital after the doc does his thing, it's inpatient.
     
  14. MagisterCultuum

    MagisterCultuum Great Sage

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    It may not be the most meaningful distinction, but it is how the data is organized.


    A lot of the US's outpatient expenses probably come from Emergency Room visits. Since ERs cannot turn away patients for lack of insurance like most clinics can, the uninsured often go to the ER to deal with issues that an insured patient would have treated much more cheaply elsewhere. ERs raise their prices because they know they will have to absorb the losses of those patients who have absolutely no way to pay.


    When I took my father to the ER for his unexplained 104.2 degree fever last week (his leukemia doctor told us to go there to get blood cultures, since it was the second high fever that week), a nurse told us that ER visits always take at least 3 hours. Apparently they are required to run certain blood tests on everyone they admit, and cannot let a patient leave until they get the test results. (If this is true it would have made a whole lot more sense to have the blood drawn at triage when we first arrived, rather than waiting for a room to open up and then having us wait there half an hour for a nurse to come around to draw blood.)
     
  15. Core Imposter

    Core Imposter Deity

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    Well, I've spent more time in the health care system than I like to think about. I believe that defensive medicine is a much more expensive proposition than is shown in the data above. It permeates the entire mindset of the entire system. I don't think we will ever get the spending under control until we have serious tort reform.

    The other thing we need to do is give the patient a financial stake in the process and put market forces to work.
     
  16. Cutlass

    Cutlass The Man Who Wasn't There.

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    "Defensive medicine" is a political myth. Malpractice costs for the whole health care sector are only about 2% of costs. And states that block malpractice claims aggressively, like Texas, have much higher "defensive medicine" costs than states that are very open to malpractice claims. The maximum that could be conceivably "saved" is 0.5%. And that would require screwing over injured patients.
     
  17. Dachs

    Dachs Hero of the Soviet Union

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    Winner is not Polish.
     
  18. Princeps

    Princeps More bombs than God

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    Obviously its the part where money is being secretly siphoned off for the secret program to fight the imminent alien invasion.
     
  19. Leoreth

    Leoreth 心の怪盗団 Moderator

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    Yeah, I'm sure it's fun to compare treatment costs while you're having a heart attack.
     
  20. Bestbank Tiger

    Bestbank Tiger Deity

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