Health care prices in the United States
[1] Compared to other OECD countries, U.S. healthcare costs are one-third higher or more relative to the size of the economy (GDP).
A study conducted by the California Healthcare Foundation[13] found that only 25% of visitors asking for pricing information were able to obtain it in a single visit to a hospital.
Hospitals, doctors, and other medical providers have traditionally disclosed their fee schedules only to insurance companies and other institutional payors, and not to individual patients.
Uninsured individuals are expected to pay directly for services, but since they lack access to pricing information, price-based competition may be reduced.
Organizations such as the American Medical Association (AMA) and AARP support a "fair and accurate valuation for all physician services".
[19][20][21] Recently, some insurance companies have announced their intention to begin disclosing provider pricing as a way to encourage cost reduction.
[27] This government mandated care places a cost burden on medical providers, as critically ill patients lacking financial resources must be treated.
This is due to: Medicare was established in 1965 under President Lyndon Johnson, as a form of medical insurance for the elderly (age 65 and above) and the disabled.
The Congressional Budget Office (CBO) reported in October 2017 that adjusted for timing differences, Medicare spending rose by $22 billion (4%) in fiscal year 2017, reflecting growth in both the number of beneficiaries and in the average benefit payment.
[34] As the largest single purchaser of medical services in the U.S., Medicare's fixed pricing schedules have a significant impact on the market.
The AMA-sponsored committee in charge of determining RVUs of medical procedures that inform Medicare's payment to physicians has been shown to grossly inflate their figures.
[40] Separate from the employer market are the ACA marketplaces, which covered an estimated 12 million persons in 2017 who individually obtain insurance (e.g., not as part of a business).
The law is designed to pay subsidies in the form of premium tax credits to the individuals or families purchasing the insurance, based on income levels.
In addition, many employees are choosing to combine a health savings account with higher deductible plans, making the impact of the ACA difficult to determine precisely.
For those who obtain their insurance through their employer ("group market"), a 2016 survey found that: For the "non-group" market, of which two-thirds are covered by the ACA exchanges, a survey of 2015 data found that: According to the OECD, U.S. prescription drug spending in 2015 was $1,162 per person on average, versus $807 for Canada, $766 for Germany, $668 for France, and is capped in the UK at £105.90($132) [46] The reasons for higher U.S. healthcare costs relative to other countries and over time are debated by experts.
In other words, the U.S. would have to cut healthcare costs by roughly one-third ($1 trillion or $3,000 per person on average) to be competitive with the next most expensive country.
[3] Important differences include: The Congressional Budget Office analyzed the reasons for healthcare cost inflation over time, reporting in 2008 that: "Although many factors contributed to the growth, most analysts have concluded that the bulk of the long-term rise resulted from the health care system's use of new medical services that were made possible by technological advances..." In summarizing several studies, CBO reported the following drove the indicated share (shown as a range across three studies) of the increase from 1940 to 1990:[53] According to Federal Reserve data, healthcare annual inflation rates have declined in recent decades:[5] While this inflation rate has declined, it has generally remained above the rate of economic growth, resulting in a steady increase of health expenditures relative to GDP from 6% in 1970 to nearly 18% in 2015.
