Ezra Klein’s Astonishing New Health Care Charts

Written By : McQ

Or at least they seem to have astonished Klein. Here’s one as an example:

My goodness. As Klein says:

There is a simple explanation for why American health care costs so much more than health care in any other country: because we pay so much more for each unit of care.

Anyone – what’s missing from this rather simplistic explanation?

Cost.

What is the real cost of delivering the expected/desired/demanded health care during a doctor’s visit? What is the cost per “unit delivered”. And if it is higher, why is it higher? Is it higher simply because we’re being gouged as is implied by Klein? Or is more being delivered per unit and thus justifying the higher cost? The chart tells us none of that.

What will these various countries pay for during a visit? And given that, which country’s patients get the most (and best) care for the money? Again, the chart tells us none of that.

As has been pointed out any number of times, when you remove non-health care related deaths from this country’s life expectancy statistics, we are in better shape than anyone. In fact, when you get into the later years, survival rates among our elderly are unsurpassed by any system. That to me would say that we must be delivering something during those visits that the mere “price” doesn’t reflect.

But all folks like Klein ever seem to want to talk about is “price”. This may comes as a surprise to some, but price is determined by cost and competition. It’s not an arbitrary number. In fact, competition keeps both cost and price (and thus profit) at a reasonable level. That’s how a market works, even one as distorted by government intrusion as our health care system.

There’s also another 800 pound gorilla in the room. Actually the gorilla is the bar on the graph disguised as a $72 fee from Medicare. How do you think the difference between those paltry fees and the real cost of the visit are recovered? Look left, young man, look left. That big bar of private insurance subsidizes Medicare by absorbing the cost shifting which goes on from Medicare payments which don’t cover cost. Without the ability to do that fewer and fewer doctors would accept or treat Medicare patients. In fact, why do you think they limit them now? That reality, of course, isn’t reflected at all in the chart.

Additionally, there is the quality of care – what does a $30 doctor’s visit buy in Canada or the UK in comparison with a $72 Medicare visit in the US? We really have no idea. So how then is such a comparison relevant to anything? I can buy a KIA or I can buy a BMW. Few would argue they have the same cost and certainly not the same value. The quality is entirely different. Yet they’re both cars. The chart assumes all care is equal. But we know that isn’t true.

In fact, these sorts of apples and road apples comparisons aren’t useful for much more than gulling the masses when pushing an agenda. Surely, common sense tells us, we can get more for less, right? Of course not. Most people discover during their lifetime that you do indeed get what you pay for. And in the field of health care, the differences can be vast.

In terms of a serious argument for government run health care in a free country, the astonishing charts leave a lot more unsaid than said. Or put another way, they and the argument Klein tries to make with them aren’t worth the powder to blow them to hell.

[Crossposted at QandO]

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Bildo

In Spain, if they only pay $15 for an office visit, and a doctor schedules an appointment every 15 minutes, then there will be approximately 4 visits per hour for a total of $60.00, assuming there aren't any no-shows. The doctor has to have a nurse, and in the US RN's make between $25 and $40 per hour depending on experience and their job, but we'll take the low end of that range, $25, leaving $35. There's also payroll taxes, insurance, and other costs of labor, but we'll just take the base hourly wage. Also, there's got to be a front desk attendant, or somebody who talks to people as they come in, we'll pay them the US minimum wage, $7.55/hr, leaving $27.45. If those were the only costs, there would be approximately $57,096/yr left for the doctor, assuming a 40 hour work week, and no vacation (he wouldn't be able to afford one anyway).

Now, I've obviously left out a few things, like facilities costs (i.e. rent, utilities, maintenance, etc.) office supplies, medical supplies, and malpractice insurance. In the US malpractice insurance costs anywhere from $10,000/yr up to $300,000/yr. Our case would use the lower end of that because it's a general practitioner. There's the costs of record keeping, billing, and accounting. There's also education costs to stay board certified.

If the chart is accurate, then the physician would not make any money, and would probably have to pay a fairly large sum in order to have the luxury of looking at your boils, hemorrhoids, and canker sores. To put it another way, the true cost of health care is not only subsidized by the taxpayers, it is hidden from them.
GDR

From CNS News:

“Republican Sen. Orrin Hatch of Utah, who has served in the Senate for 33 years and is a longtime member of the Judiciary Committee, told CNSNews.com that he does not believe the Democrats’ health-care reform plan is constitutionally justifiable, noting that if the federal government can force Americans to buy health insurance “then there is literally nothing the federal government can’t force us to do.”

http://www.eyeblast.tv/public/checker.aspx?v=Gd6U…

Clearly there is much more at stake then simply money or even your health in this so-called "health care" reform.

If we are to remain a free and independent people who's government is limited and serves at the will of the people, this takeover scam must be defeated.
http://conservativebootcamp.com martinhale

But all folks like Klein ever seem to want to talk about is “price”. This may comes as a surprise to some, but price is determined by cost and competition.

Well, in the case of health care services, sorta.

Under Medicare outpatient visit charges are determined through a diagnostic code and a couple of "multiplier" factors. The diagnostic code is what it is. That part of the equation is fairly immutable. The multiplier factors, however, are where it gets interesting. One multiplier is whether the doctor is rural or urban – rural docs get screwed by Medicare routinely. Another multiplier is dependent upon what the provider did during the examination of the patient. If a provider focuses solely on the presenting problem and nothing else, the office visit is priced as low as it can go. As the provider examines multiple body systems, e.g. respiratory, circulatory, cardiovascular, nerve, digestive, reproductive, lymphatic, etc., the price of the visit rises. Note to all non-providers out there: examining more systems doesn't necessarily mean spending oodles more time with the patient – it only means that you pack more questions into the time you have with the patient. Knowledge of this has kept some providers still accepting Medicare while others have dropped it, because they feel they can game the system and increase their reimbursement to what they think it should be.

When you get into the world of private insurance, prices are usually determined through the "UCR" method, or prices are defined as a percentage of Medicare. UCR stands for usual, customary and reasonable, and in essence represents the "going rate" for a particular service in a locality. Or at least that what it used to mean. Now the insurers self-publish their own UCR rates based as much on their own actuarial analysis as on actual local rates. The 'percentage of Medicare' method of determining prices is usually part of a game of negotiation played with the providers. I've seen services priced at a fractional percentage of Medicare and others priced at as much as 150% of Medicare.

The point is that the pricing of that office visit may or may not have anything to do with actual cost.
happirick

well done bildo!

Like this article, I’ve also wanted to see a true portrayal of where the money goes. I’d like to see a pie chart that shows where the money winds up:
Physicians Income
Other Health Professionals Income (nurses, PTs, etc)
Facilities (costs of running hosptials, offices, etc)
Equipment
Pharmaceuticals (broken down into product, expenses, profit)
Med Insurance (broken down into expenses, profit)
etc.
Malpractice Expenses (insurance, non-covered payouts, etc)
etc.

I think we’d all be surprised by some of these analyses.
http://noompa.wordpress.com/2009/11/06/health-care-costs/ Health Care Costs « Chasing Fat Tails

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