The reason Americans spend so much money isn’t because we go to the doctor a lot. On average, Americans actually see the doctor slightly less than people in other developed countries.
Americans go to the doctor, on average, four times each year, according to data from the nonprofit Commonwealth Fund. Compare that to Canada, where citizens average 7.7 doctor visits per year, and France, which averages 6.4. The United States averages 125 hospital discharges per 1,000 people annually, which is higher than Canada (83) but lower than France (166) and the United Kingdom (129).
The reason American health care is expensive is because when we go to the doctor, it costs more than when someone in Canada or England or France or any other developed nation goes to the doctor.
A day in the hospital here costs $5,220, versus $4,781 in Switzerland and $765 in Australia. There is a biannual report from the International Federation Health Plan that compares medical prices across countries. It’s hard to find any category where the United States is not the priciest. Here, for example, is what the data on appendectomies looks like (See chart here).
Other developed countries use price controls in medicine. The government negotiates with drug companies, device makers, and doctors to set lower prices. The government is buying in bulk, and has the power to win those negotiations. These countries regulate medical prices akin to how they regulate the price of electricity or water: a service that everyone needs at a reasonable price but would face significant difficulty bargaining for on their own.
The United States does set medical prices for the 50 million elderly Americans who rely on Medicare. The government-run insurer has a fee schedule that says exactly what doctors can bill for every visit or checkup — and usually ends up with lower prices as a result.
But for the 155 million Americans who get coverage through their employers — and 22 million in the individual market — that task is left to the insurers and customers. We are not very good at it.
I recently spoke with Todd Anderson, a father in the Philadelphia area, who told me about one of those medical bills I mentioned earlier. His son went to the ER late last year after cutting his finger with a kitchen knife.
Todd’s son is a college sophomore; his son’s roommate, a biology major, said that he’d recently used the knife to cut raw meat, and drove him to the emergency room.
The physician assistant at the emergency room examined the son’s finger and treated him with liquid stitches and a bandage. A few months later, Anderson received two separate bills totaling $2,237 — one for $1,032 from the hospital, another for $1,438 from the doctor — for the Band-Aid and its application. The doctor group charged the Andersons for two days in the emergency room, because the late-night visit began around 11:30 pm and ended around 1 am.
“I feel like I’m being told to pay the hospital and the doctor for the exact same service, and no one has been able to explain to me why it can possibly cost this much,” Anderson says.
These types of bills just don’t happen in other countries, where the government negotiates with providers to set a reasonable fee for what a Band-Aid delivered in an emergency room can cost.
“The issue of prices needs to be put on the table,” says Drew Altman, the president of the Kaiser Family Foundation. “A lot of the effort right now is aimed at reducing volume of care, not price of care. But what people are more concerned about is their out-of-pocket costs.”