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The Outrageous Costs of Medical Care: Echocardiograms.

2014-12-16

We have harped on high medical costs in the US again and again, and the New York Times has provided reams of documentation for this shameful situation.  A December 15 article, part of a series, concentrates on the cost of echocardiograms.

An example is the cost that a recent patient was charged at a community hospital: $5,500.  For the same test, arguably more advanced, at a university hospital, with a cardiologist supervising, he was charged $1,400.  Medicare pays roughly $400 for the test at a hospital, so the reimbursement was the same.  By contrast, Medicare only pays $93 for an echocardiogram performed at an outpatient clinic.  A patient usually pays $80 towards the fee under Medicare.  The number of echocardiograms ordered has almost doubled in the last ten years.

In the rest of the developed world, prices are significantly lower.  Japan, which lays claim to development of the echo technology, charges are $50 to $88.  Germany pays $115.

To illustrate the results of this cost structure, Japan spends about 9.6% of its GDP on healthcare, or $4000, while the US spends 17%, or over $9000.  The life expectancy at birth in Japan is considerably longer than that in the US.

The companies in the US that make ultrasound scanners refuse to publicly disclose their prices.  Medical prices in the US also include much larger proportions of administrative costs, including people who make decisions as to whether doctors will be allowed to order tests in the first place.  These administrative costs are much higher for private insurance companies than for Medicare, contradicting the “common knowledge” that government costs are higher than private costs.

In other developed countries, costs are controlled by government bodies, which allow “reasonable” profits by providers and manufacturers and keep close track of utilization.  In the US, charges by providers and manufacturers are not controlled at all.  Only reimbursements by Medicare and Medicaid are controlled by government bodies.

This results in a wide range of prices, with the uninsured patients paying enormously more than privately insured patients, who pay vastly more than Medicare patients, who pay more than Medicaid patients.  As a result, half of doctors in the US don’t even accept Medicaid patients at all; those who do, find that Medicaid patients make up half of their practices.

The NYT article can be found at: http://www.nytimes.com/2014/12/16/health/the-odd-math-of-medical-tests-one-echocardiogram-two-prices-both-high.html

 

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