So I get that by cutting out the insurer you are saving some funds, but where does the rest of the difference come from? Are the hospital rooms and surgeons so much cheaper because everyone in those countries pay them rather than just the few people who actually use their services?
* The hospital system in Belgium is 99% either state or non-profit owned. Less sticky fingers. Less luxury.
* Infrastructure (buildings, tools, ...). The infrastructure is extremely heavily state subsidised.
* Medical professional wage negotiations. Medical professionals earn quite a bit less in Belgium than in the US. Quite many (most?) medical pros actually seem to have their priorities right: helping people solve medical problems.
* Choice. In Belgium, people, not insurers choose the hospital they go to, based on reputation and perceived quality.
* Volume. Healthcare in Belgium is fairly accessible, probably one of the most accessible in the world. This means few people putting off operations for financial reasons, so higher volume.
* State subsidies spilling over to foreign patients in unintended ways. I could very well imagine some of the marginal cost of an operation on a non-resident American citizen also being carried by the state in other ways.
Two anecdotes, logical consequences of this system.
1) My (poor by US standards) 90 years old neighbour had a hip replacement at the age of 86, 100% paid by the state.
2) An aunt working as a nurse told me about a phenomenon that was quite common until a few years ago: "winter rabbits", old people "dumped" into hospital for several weeks even if they were not ill. Relatives dumped them at the hospital as a (to them) low cost way of getting rid of them for a few weeks while on holiday for example.
I've lived in Scandinavia, with largely similar systems (they vary a bit, I've seen Sweden and a bit of Finland). The health care systems are centrally planned and administered, and hence have the typical problems doing the work in an efficient manner.
For instance, it is acknowledged in international comparisons as really hard to get diagnosed because doctors just don't have the time, largely because of administration. Me and others I know have had years and decades of lowered life quality from easily cured problems like bacteria infections, simple knee problems, allergies and iron/vitamin deficiencies.
I've heard good things about the German health care system.
Notes: I have also lived a few years outside of the Nordic countries, so I have some perspective. And I agree that the US system seems the craziest one on the Western world.
Edit: The government has recently decided that all illegal immigrants in Sweden will get free health care, without any paperwork. If you need an expensive and can fake an Ukrainian accent in English, or something similar, there is a cheap solution for millions of Americans with a ticket to Sweden...
"The government has recently decided that all illegal immigrants in Sweden will get free health care, without any paperwork."
If the vast majority of people treated are not subject to itemised accounting, the bureaucratic expense of having itemised accounting for one small group can actually be higher than just treating them for free as well.
Not for expensive operations costing 10K++ €. The administration of those payments is already set up for e.g. tourists that get sick.
Since it seems I need to explain in more details:
The problem is that potentially anyone which can get to Sweden can get expensive treatment free. This is potentially ruinous for a small country. Just the millions of poor gypsies in Romania/Bulgaria which lack good health care for poor people ("I'm from the republic of Moldova outside the EU. I am here illegally because criminals are after me") is enough to break the Swedish health care system if they use this loophole in an organized way. Or normal citizens in those countries, for that matter. We will see...
The fundamental problem is that everyone in the system benefits from spiraling costs, and so they make them spiral in ever more egregious ways.
Everyone benefits? Well, higher costs are obviously better for hospitals and doctors, but don't insurers want to control costs? Not really. As long as insurers pass costs through, the more they pay, the more they can get away with charging, and the bigger their profits can be. Insurers want predictable and rising costs, not low ones.
How egregious is the inflation getting? Let me give you an example. From the mid-90s to now the cost of childbirth tripled. See http://www.nytimes.com/2013/07/01/health/american-way-of-bir... for confirmation. In England there was controversy because the royal childbirth cost over 2x what the average childbirth there does. It still cost half the average US childbirth.
And no, Obama's plan does not address this issue. It says that insurance companies must spend at least 80% of premiums on health care. If I was an insurer, I'd look at this and see fraud as an opportunity to have the 20% slice which covers my costs and profits continue to rise, and put out effort to catch exactly enough fraud to keep the amount paid out at exactly 80% of the premiums that I collected.
It would be interesting to see a breakdown of what really accounts for the majority of the price differences. This article mentions some things in passing but ultimately doesn't conclude with the main quantitative insights.
Most of the difference here is that our hospitals have to fob off the money they lose from treating patients without health care onto those that do. They charge a lot more because every 5th or 6th person coming into the emergency room has no health care, must be given treatment, and will never be able to pay for it. Thus, we all take on that burden through a backdoor, round the corner, through the mailslot, rather than just by dealing with it and giving everyone health care....
That doesn't really explain how the healthcare can cost 5x or more. What you've said is that every 5th or 6th person is a free rider (presumably due to laws such as the COBRA http://en.wikipedia.org/wiki/Consolidated_Omnibus_Budget_Rec...) ... if that was the source of the added costs, it would suggest they would only be 1.2 or 1.5x higher, not 5x or more.
The #1 reason healthcare costs more is because of over-treatment. When providers are paid by the procedure, suddenly everyone needs a procedure (or ten). Combine that with third-party responsibility (insurance pays doctor, employer pays for insurance), opaque pricing structure (doctors are the only ones that can tell you if a procedure is necessary or not), and you have a "market" that is "broken".
Put simply, everyone wants "the best care" when they never have to actually pay for it. And as long as providers are incentivized to provide "the best care", they will do it, as lost as "best" equals "expensive".
Over-treatment doesn't explain why the same treatments cost more, though. The base charge for simply occupying a hospital bed for one day is absurdly high in the U.S. compared to just about any other country (Canada comes close, if you're a non-Canadian and therefore actually liable for it).
COBRA, from my understanding, doesn't give anyone a free ride. It just means that the former employee has to pay the costs themselves:
COBRA does not, unlike other federal statutes such as the Family and Medical Leave Act (FMLA), require the employer to pay for the cost of providing continuation coverage. Instead it allows employees and their dependents to maintain coverage at their own expense by paying the full cost of the premium the employer and the employee previously paid, plus up to a 2% administrative charge (50% for the latter 11 months under the disability extension).
COBRA doesn't mean you get free healthcare. It means you pay the rate that your employer did, plus a 2% administrative fee.
It's better than individual coverage because individual plans are made more expensive to counteract adverse selection (i.e. people who buy plans are sicker than those who don't) but it's not really affordable for someone who just got laid off.
That's important but add in increased pay, litigation, and huge medical billing overhead.
Just think every time a company negotiates prices both sides spend time which is why stores list prices and don't let you negotiate but car dealerships do.
Indeed it would. My gut feel from reading many articles like this is that in American healthcare everything is more expensive. There is more administrative overhead, the salaries for doctors are higher, owners of private hospitals expect more profit, drug companies has better profit margins, implant manufacturers have better profit margins. I have also heard the American hospitals spend more money on purchasing the latest equipment.
So my theory is that there is no incentive to cut costs, everyone in the healthcare industry profits form the inflated costs. Even the insurers do as long as they can keep raising the insurance costs.
Your health is priceless. You'd pay anything for yourself or your children. Therefore the going rate will be whatever maximizes profits, which doesn't necessarily mean providing services to everyone (at least in backwards countries) but usually means providing service to "most of the community", more or less.
That's why when very few people are tourists, its profitable for the tourists. Obviously this doesn't scale because if you can outsource basically all non-emergency medical care, prices will rise for tourism because the served group now earns 5x as much so "why not" charge 5x as much if the locals don't go there anymore.
Its no different than "tourist-y" restaurants and stores. Once the locals are chased away, prices explode to what the tourists can pay, what the locals pay doesn't matter, they're kicked out of the market.
Once the real economic value disappears, all thats left are scammers. So "everybody knows" that going to .mx for raw vanilla, tequila, and jewelry is a losing proposition because so many crooks are involved. You'll hear accusations of this for medical tourism, but its just not there yet. It'll take awhile but the economic forces are inevitable, at which point there will be true medical disaster stories about scammers.
FTA:
> Dr. Cram, the Iowa health cost expert, points out that joint manufacturers are businesses, operating within the constraints of varying laws and markets.
> “Imagine you’re the C.E.O. of Zimmer,” he said. “Why charge $1,000 for the implant in the U.S. when you can charge $14,000? How would you answer to your shareholders?” Expecting device makers “to do otherwise is like asking, ‘Couldn’t Apple just charge $50 for an iPhone?’ because that’s what it costs to make them.”
> But do Americans want medical devices priced like smartphones? “That,” Dr. Cram said, “is a different question.”
Indeed.
Maybe mixing something that is designed to work better when no ethics is involved (free market and capitalist ideology) with a highly relative to ethics sector (healthCARE) isn't such a good idea. Well, not for shareholders of course.
While I agree that liability is important, it becomes less of an issue with treatment so much cheaper, especially for issues that do not threaten your ability to travel. If something goes wrong, you can still go for the 80% cheaper corrective treatment.
It could work if it was accredited/malpractice was covered somehow, then just make a hospital in Mexico or the Bahamas. Of course it would need to be less expensive than the USA, have better outcomes, and have the same level of legal responsibility...we are a very litigious nation.
Why a single hospital? Have a website which lists hospitals and reviews of people, the prices charged, and even the doctors who practice there. Then people could book the trips through the site, which would take a 5% cut.
I'm a bit skeptical of crowdsourced ratings for this kind of thing, given the relatively poor quality (and frequent gaming) of ratings on sites like Yelp and Amazon.
Some objective information, like third-party-audited statistics on treatment outcomes, on the other hand, would be very valuable.
True, and I'd love to see that kind of information. But it's a hard problem: doing solid outcomes analysis of hospital procedures is orders of magnitudes harder than crowdsourcing reviews!
It's a good idea... and also already a big thing. Look at all the AdWords for [dental vacation] and similar searches. Amish groups taking train rides to Mexico for dental work paid in cash is also apparently a thing.
It could be much bigger, across more procedures... but often people needing care are, by virtue of both age and their current medical worries (and past experiences with bad providers), less adventurous.
A big breakthrough would be if Congress, as a cost-saving measure, allowed Medicare payments for out-of-country treatment.
"A big breakthrough would be if Congress, as a cost-saving measure, allowed Medicare payments for out-of-country treatment."
If Congress cared about saving money when it comes to Medicare they wouldn't have passed Medicare Part D, which by design doesn't allow for the negotiation of lower drug prices with pharmaceutical companies like the Department of Vererans Affairs is allowed to do. The fact of the matter is that a lot of palms are getting greased in Washington when it comes to healthcare. Thus why Obamacare doesn't have a public option.
Precisely. I worked a little bit for a large pharma company (in a finance capacity) and I saw first hand how incredibly profitable it is for the US government to not have negotiating power on drug prices.
Pharma companies make a wildly disproportionate share of their global profits in the US simply because they don't have to negotiate with a large 'super-buyer" (e.g. medicare).
Now if pharma R&D were productive I wouldn't have a problem with this, but it's notoriously unproductive (and not just because of the admittedly overly burdensome FDA regulations).
I would support a grand compromise:
1) for pharma companies: reduce FDA hurdles for drug approval, but add more aggressive post-approval tracking (to reduce the risks associated with a lower regulatory hurdle)
2) for the rest of us: allow medicare to negotiate aggressively on price, this will have a ripple effect and lead to lower drug prices for all.
It's not accurate to say the gov't doesn't use it's bargaining power to get lower priced drugs. You are correct that it doesn't negotiate lower prices like the DoD does (through an RFP and bid system), however it does:
1. force drug makers to match the lowest price that it offers to anyone else. In other words Medicare gets the same (or lower) price as big insurers like United.
2. force drug manufacturers to discount the cost of drugs for Medicare Part-D once the patient enters the donut hole. Over the next 5 years that discount will increase to 50% of the cost incurred within the donut hole (this will total several billions per year)
3. for Medicaid, force the drug manufacturers to provide a 23.1% discount off the WAC (wholesale price) OR the lowest price offered to anyone else (whichever is lower)
4. for disproportionate share hospitals (hospitals that serve the uninsured), force drug companies to provide the Medicaid discount (at least 23.1%) to those hospitals for all the drugs they buy, whether or not they go to the uninsured
5. if the drug company increases the cost of its drug at a rate greater than the rate of inflation (CPI), they have to pay CPI penalties each year. There are some drugs that Medicaid gets a 90% discount on (far lower than any insurance company could get)
So yes, you are correct that federal gov't doesn't directly negotiate individual drug prices, but it sure as heck uses it bargaining power to get some super sweet deals!
"A big breakthrough would be if Congress, as a cost-saving measure, allowed Medicare payments for out-of-country treatment."
They would never do it. The amount of fraud in Medicare is astounding because the gov't doesn't use a lot of resources to verify claims. Can you imagine what would happen if the services were provided outside of the US? You probably couldn't even sue the provider to recover money from fraudulent claims.
Two friends and I are working on exactly this! Would love to talk. I'll PM you with my contact info.
Another good place to start understanding the (dis)incentives in US healthcare pricing is Time magazine's "The Bitter Pill" http://www.time.com/time/magazine/article/0,9171,2136864,00..... Though it's important to note it's not just a US -> abroad market, it's a many-many graph. People travel for cost, procedure availability, doctor specialization, for the experience of travel, etc.
If anyone is interested in talking and passionate about this topic, I'd be happy to treat you to coffee with my co-founder and I in downtown SF. Feel free to email me, my email is in my HN profile.
I was looking for this today, and was surprised that I couldn't find one. Wish you luck and speed, because I need some dental work done and never have any idea where I should take vacations.
So what are the negatives? This NYT article reads like a PR piece for medical tourism... What about malpractice insurance in Belgium/Poland and what happens if there are problems down the road with TFA's hip implant?
I don't know about insurance malpractices but how this malpractice outweigh or even relevant to this topic. And also out of of curiosity does USA hospital give guarantee of not having any problem with implants.
What happens if there are problems down the road with an implant (or any other procedure) you got in the US? You pay for more procedures, that's what.
The ability to sue for millions of dollars is the one "advantage" of buying your medical care (or airplane tickets) in the US. We each need to decide how important that is to us.
Your insurance company is likely to deny coverage for procedures performed outside the US (if for no other reason than because they can), so that's a definite risk.
But that's a reason to choose Belgium over somewhere like Guatemala -- while you won't get the gift shop or valet parking, the quality of care is much more likely to be at the same level as in the US.
"In addition, device makers typically require doctors’ groups and hospitals to sign nondisclosure agreements about prices, which means institutions do not know what their competitors are paying. This secrecy erodes bargaining power and has allowed a small industry of profit-taking middlemen to flourish: joint implant purchasing consultants, implant billing companies, joint brokers. There are as many as 13 layers of vendors between the physician and the patient for a hip replacement, according to Kate Willhite, a former executive director of the Manitowoc Surgery Center in Wisconsin."
A simple legal remedy here would be to invalidate this sort of NDA agreement. The government is already involved as a customer in the health care market, and having the courts simply no longer recognize contracts that prohibit disclosure of prices would bring some immediate transparency to many involved.
The law could also go a step further and actually set up/order public listings of prices (this is already done in a lot of industries where vendors try to avoid competing on price).
I was a medical tourist in the opposite direction earlier this year. I'm from Canada, land of free health care, and my doctor told me that I would have to wait 6 months to see a specialist.
My ailment[1] prevented me from sleeping most nights, caused severe, productivity-ending headaches all day, and caused me to pop ibuprofens like candy. My PCP attempted to use water to eliminate what he believed was an earwax impaction 14 times on separate days. It had been almost 2 months of me completely disabled before he was willing to put in a referral to the ENT. When he did, they told me it would be six months. You can imagine my frustration.
So, I had a friend drive me to a clinic in Washington state. A bit of discussion, $900 and two visits later, I had seen an otolaryngologist, he had used a small curette to clean out the ear canal, and I was better. $900 to not cry myself to sleep all day for six months seemed like a pretty good deal to me.
Six months later I got a phone call from an office of an ENT here in Canada. I was unbelievably angry.
[1] I had a condition where the skin had grown over the eardrum in your ear. It required surgery by an otolaryngologist to remove the problem and restore my hearing.
I read a while back that the US hospitals charge foreign medical tourists competitive rates. But getting that rate as an American is another matter since the hospitals make so much with their standard rates.
I mean the price charged to people from other countries who shop different hospitals for particular medical procedures - "medical tourists".
Ordinary tourists who come for other reasons and happen to seek medical care are a completely different story - they'll be charged the "highest possible fee, 'cause we can" rate.
I had a friend who was in the military, he chipped a bone in his food during training and gave him a limp. He couldn't prove it happened on training grounds, so the military wasn't willing to pay to fix it, but he was also able to resign (I question this logic. Nice job Canadian military).
So he scheduled surgery, it wasn't due for 4 years. His life wasn't in danger, it wasn't completely debilitating, he could walk with a limp. So rather than go to another country, he actually soldiered it (he's the soldiering type it seems). Well guess what 4 years of a persistent limp + exercise does to you. Nothing good. He finally had the bone chip removed, I'm sure a cheap operation. Only now he's had 6+ years of physiotherapy correcting his improperly developed muscular system.
+1 Canada for having a public health care system that moves fast when it needs to.
-1 Canada for having a public health care system that moves incredibly slow when it doesn't need to.
Six months later I got a phone call from an office of an ENT here in Canada. I was unbelievably angry.
I had a similar experience with the UK's public healthcare system when I was studying abroad there; had I been completely dependent on it, I likely would've died before being treated.
Jesus Christ, the price is 5 times lower for a non-EU citizen in Belgium (which is still pretty expensive by worldwide or even European standards)? That's just unbelievable...
Eventually I'll need a lung transplant, and possibly more (I have Cystic Fibrosis). It's one thing to talk teeth and knee joints, but lungs and livers are a completely different story. That said, paying $150K+ isn't something I'm looking forward to (or even know that I'll be able to do), so medical tourism is something I follow closely to see how it develops.
Cross-European medical tourism could explode next year, after 2011/24/EU: Directive on patients' rights in cross-border healthcare enters into application.
The directive created a legal framework for patient’s right to seek healthcare in another member state and for reimbursement.
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[ 4.4 ms ] story [ 112 ms ] thread* The hospital system in Belgium is 99% either state or non-profit owned. Less sticky fingers. Less luxury.
* Infrastructure (buildings, tools, ...). The infrastructure is extremely heavily state subsidised.
* Medical professional wage negotiations. Medical professionals earn quite a bit less in Belgium than in the US. Quite many (most?) medical pros actually seem to have their priorities right: helping people solve medical problems.
* Choice. In Belgium, people, not insurers choose the hospital they go to, based on reputation and perceived quality.
* Volume. Healthcare in Belgium is fairly accessible, probably one of the most accessible in the world. This means few people putting off operations for financial reasons, so higher volume.
* State subsidies spilling over to foreign patients in unintended ways. I could very well imagine some of the marginal cost of an operation on a non-resident American citizen also being carried by the state in other ways.
Two anecdotes, logical consequences of this system.
1) My (poor by US standards) 90 years old neighbour had a hip replacement at the age of 86, 100% paid by the state.
2) An aunt working as a nurse told me about a phenomenon that was quite common until a few years ago: "winter rabbits", old people "dumped" into hospital for several weeks even if they were not ill. Relatives dumped them at the hospital as a (to them) low cost way of getting rid of them for a few weeks while on holiday for example.
For instance, it is acknowledged in international comparisons as really hard to get diagnosed because doctors just don't have the time, largely because of administration. Me and others I know have had years and decades of lowered life quality from easily cured problems like bacteria infections, simple knee problems, allergies and iron/vitamin deficiencies.
I've heard good things about the German health care system.
Notes: I have also lived a few years outside of the Nordic countries, so I have some perspective. And I agree that the US system seems the craziest one on the Western world.
Edit: The government has recently decided that all illegal immigrants in Sweden will get free health care, without any paperwork. If you need an expensive and can fake an Ukrainian accent in English, or something similar, there is a cheap solution for millions of Americans with a ticket to Sweden...
If the vast majority of people treated are not subject to itemised accounting, the bureaucratic expense of having itemised accounting for one small group can actually be higher than just treating them for free as well.
Since it seems I need to explain in more details:
The problem is that potentially anyone which can get to Sweden can get expensive treatment free. This is potentially ruinous for a small country. Just the millions of poor gypsies in Romania/Bulgaria which lack good health care for poor people ("I'm from the republic of Moldova outside the EU. I am here illegally because criminals are after me") is enough to break the Swedish health care system if they use this loophole in an organized way. Or normal citizens in those countries, for that matter. We will see...
Everyone benefits? Well, higher costs are obviously better for hospitals and doctors, but don't insurers want to control costs? Not really. As long as insurers pass costs through, the more they pay, the more they can get away with charging, and the bigger their profits can be. Insurers want predictable and rising costs, not low ones.
How egregious is the inflation getting? Let me give you an example. From the mid-90s to now the cost of childbirth tripled. See http://www.nytimes.com/2013/07/01/health/american-way-of-bir... for confirmation. In England there was controversy because the royal childbirth cost over 2x what the average childbirth there does. It still cost half the average US childbirth.
And no, Obama's plan does not address this issue. It says that insurance companies must spend at least 80% of premiums on health care. If I was an insurer, I'd look at this and see fraud as an opportunity to have the 20% slice which covers my costs and profits continue to rise, and put out effort to catch exactly enough fraud to keep the amount paid out at exactly 80% of the premiums that I collected.
Put simply, everyone wants "the best care" when they never have to actually pay for it. And as long as providers are incentivized to provide "the best care", they will do it, as lost as "best" equals "expensive".
And since we have such a high proportion of non-insured here, those admissions raise the cost for everyone else who DOES have insurance.
COBRA does not, unlike other federal statutes such as the Family and Medical Leave Act (FMLA), require the employer to pay for the cost of providing continuation coverage. Instead it allows employees and their dependents to maintain coverage at their own expense by paying the full cost of the premium the employer and the employee previously paid, plus up to a 2% administrative charge (50% for the latter 11 months under the disability extension).
It's better than individual coverage because individual plans are made more expensive to counteract adverse selection (i.e. people who buy plans are sicker than those who don't) but it's not really affordable for someone who just got laid off.
Just think every time a company negotiates prices both sides spend time which is why stores list prices and don't let you negotiate but car dealerships do.
So my theory is that there is no incentive to cut costs, everyone in the healthcare industry profits form the inflated costs. Even the insurers do as long as they can keep raising the insurance costs.
Your health is priceless. You'd pay anything for yourself or your children. Therefore the going rate will be whatever maximizes profits, which doesn't necessarily mean providing services to everyone (at least in backwards countries) but usually means providing service to "most of the community", more or less.
That's why when very few people are tourists, its profitable for the tourists. Obviously this doesn't scale because if you can outsource basically all non-emergency medical care, prices will rise for tourism because the served group now earns 5x as much so "why not" charge 5x as much if the locals don't go there anymore.
Its no different than "tourist-y" restaurants and stores. Once the locals are chased away, prices explode to what the tourists can pay, what the locals pay doesn't matter, they're kicked out of the market.
Once the real economic value disappears, all thats left are scammers. So "everybody knows" that going to .mx for raw vanilla, tequila, and jewelry is a losing proposition because so many crooks are involved. You'll hear accusations of this for medical tourism, but its just not there yet. It'll take awhile but the economic forces are inevitable, at which point there will be true medical disaster stories about scammers.
> “Imagine you’re the C.E.O. of Zimmer,” he said. “Why charge $1,000 for the implant in the U.S. when you can charge $14,000? How would you answer to your shareholders?” Expecting device makers “to do otherwise is like asking, ‘Couldn’t Apple just charge $50 for an iPhone?’ because that’s what it costs to make them.”
> But do Americans want medical devices priced like smartphones? “That,” Dr. Cram said, “is a different question.”
Indeed.
Maybe mixing something that is designed to work better when no ethics is involved (free market and capitalist ideology) with a highly relative to ethics sector (healthCARE) isn't such a good idea. Well, not for shareholders of course.
My wife has gone to Russia twice for dental work (her home country). Was a fraction of the quotes here, including airfare.
What about liability?
Is this any good: http://www.treatmentabroad.com/medical-tourism/ratings-and-r...
Some objective information, like third-party-audited statistics on treatment outcomes, on the other hand, would be very valuable.
It could be much bigger, across more procedures... but often people needing care are, by virtue of both age and their current medical worries (and past experiences with bad providers), less adventurous.
A big breakthrough would be if Congress, as a cost-saving measure, allowed Medicare payments for out-of-country treatment.
If Congress cared about saving money when it comes to Medicare they wouldn't have passed Medicare Part D, which by design doesn't allow for the negotiation of lower drug prices with pharmaceutical companies like the Department of Vererans Affairs is allowed to do. The fact of the matter is that a lot of palms are getting greased in Washington when it comes to healthcare. Thus why Obamacare doesn't have a public option.
http://en.wikipedia.org/wiki/Medicare_Part_D
Pharma companies make a wildly disproportionate share of their global profits in the US simply because they don't have to negotiate with a large 'super-buyer" (e.g. medicare).
Now if pharma R&D were productive I wouldn't have a problem with this, but it's notoriously unproductive (and not just because of the admittedly overly burdensome FDA regulations).
I would support a grand compromise: 1) for pharma companies: reduce FDA hurdles for drug approval, but add more aggressive post-approval tracking (to reduce the risks associated with a lower regulatory hurdle) 2) for the rest of us: allow medicare to negotiate aggressively on price, this will have a ripple effect and lead to lower drug prices for all.
1. force drug makers to match the lowest price that it offers to anyone else. In other words Medicare gets the same (or lower) price as big insurers like United.
2. force drug manufacturers to discount the cost of drugs for Medicare Part-D once the patient enters the donut hole. Over the next 5 years that discount will increase to 50% of the cost incurred within the donut hole (this will total several billions per year)
3. for Medicaid, force the drug manufacturers to provide a 23.1% discount off the WAC (wholesale price) OR the lowest price offered to anyone else (whichever is lower)
4. for disproportionate share hospitals (hospitals that serve the uninsured), force drug companies to provide the Medicaid discount (at least 23.1%) to those hospitals for all the drugs they buy, whether or not they go to the uninsured
5. if the drug company increases the cost of its drug at a rate greater than the rate of inflation (CPI), they have to pay CPI penalties each year. There are some drugs that Medicaid gets a 90% discount on (far lower than any insurance company could get)
So yes, you are correct that federal gov't doesn't directly negotiate individual drug prices, but it sure as heck uses it bargaining power to get some super sweet deals!
They would never do it. The amount of fraud in Medicare is astounding because the gov't doesn't use a lot of resources to verify claims. Can you imagine what would happen if the services were provided outside of the US? You probably couldn't even sue the provider to recover money from fraudulent claims.
*Personally I got major Dental surgery by a top doctor in Peru for ~ $300
Another good place to start understanding the (dis)incentives in US healthcare pricing is Time magazine's "The Bitter Pill" http://www.time.com/time/magazine/article/0,9171,2136864,00..... Though it's important to note it's not just a US -> abroad market, it's a many-many graph. People travel for cost, procedure availability, doctor specialization, for the experience of travel, etc.
If anyone is interested in talking and passionate about this topic, I'd be happy to treat you to coffee with my co-founder and I in downtown SF. Feel free to email me, my email is in my HN profile.
The ability to sue for millions of dollars is the one "advantage" of buying your medical care (or airplane tickets) in the US. We each need to decide how important that is to us.
That isn't necessarily true, as some states have caps on tort damages, and more corperations are lobying for similar caps/limits on civil restitution via state law: http://www.nytimes.com/2013/01/25/us/even-with-counsel-texas...
But that's a reason to choose Belgium over somewhere like Guatemala -- while you won't get the gift shop or valet parking, the quality of care is much more likely to be at the same level as in the US.
A simple legal remedy here would be to invalidate this sort of NDA agreement. The government is already involved as a customer in the health care market, and having the courts simply no longer recognize contracts that prohibit disclosure of prices would bring some immediate transparency to many involved.
The law could also go a step further and actually set up/order public listings of prices (this is already done in a lot of industries where vendors try to avoid competing on price).
My ailment[1] prevented me from sleeping most nights, caused severe, productivity-ending headaches all day, and caused me to pop ibuprofens like candy. My PCP attempted to use water to eliminate what he believed was an earwax impaction 14 times on separate days. It had been almost 2 months of me completely disabled before he was willing to put in a referral to the ENT. When he did, they told me it would be six months. You can imagine my frustration.
So, I had a friend drive me to a clinic in Washington state. A bit of discussion, $900 and two visits later, I had seen an otolaryngologist, he had used a small curette to clean out the ear canal, and I was better. $900 to not cry myself to sleep all day for six months seemed like a pretty good deal to me.
Six months later I got a phone call from an office of an ENT here in Canada. I was unbelievably angry.
[1] I had a condition where the skin had grown over the eardrum in your ear. It required surgery by an otolaryngologist to remove the problem and restore my hearing.
Good thing I had travel insurance.
Ordinary tourists who come for other reasons and happen to seek medical care are a completely different story - they'll be charged the "highest possible fee, 'cause we can" rate.
So he scheduled surgery, it wasn't due for 4 years. His life wasn't in danger, it wasn't completely debilitating, he could walk with a limp. So rather than go to another country, he actually soldiered it (he's the soldiering type it seems). Well guess what 4 years of a persistent limp + exercise does to you. Nothing good. He finally had the bone chip removed, I'm sure a cheap operation. Only now he's had 6+ years of physiotherapy correcting his improperly developed muscular system.
+1 Canada for having a public health care system that moves fast when it needs to.
-1 Canada for having a public health care system that moves incredibly slow when it doesn't need to.
I had a similar experience with the UK's public healthcare system when I was studying abroad there; had I been completely dependent on it, I likely would've died before being treated.
The directive created a legal framework for patient’s right to seek healthcare in another member state and for reimbursement.
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2...