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Comparative World Health Spending

By March 7, 2012Commentary

As its name suggests the International Federation of Health Plans is an organization of health plans from many countries who meet to discuss issues of common concern, largely around the growth of health spending.  The group regularly releases a report on comparative pricing in various developed countries.  The 2011 version is the third in the series and is now out.   (IFHP Report)   The report is potentially weak because for many countries only one data source was relied upon, but it probably gives a somewhat representative idea of pricing variations across countries.  Although spending is a combination of utilization and price, much of the variation around the world seems to relate more to unit price differences than to utilization ones.   As might be expected, the United States pays the highest prices by a pretty significant margin.  It should be noted that the prices are not adjusted for purchasing power, but even if they were, among this group of developed countries those adjustments would not likely change the relative standings of prices.

A few examples give you a sense of the variation.  Imaging use and cost has been a concern in the United States.  An MRI varies in price from $116 in Argentina to a commercial average of $1080 in the US.  Medicare and Medicaid, however, would pay less than this and some commercial payers in the US pay as little as $500.  The average commercial charge for a hospital stay in the US is $15,700 and in all of the other countries the price is at $5000 or less.  Again, Medicare would have lower prices but still would be well above the price in other countries.  The cost for a routine physician office visit ranges from $9 in Argentina to a commercial average of $89 in the United States, with other countries like France at $23; Canada at $30, Germany at $40 and Switzerland at $64.  An interesting example where the United States is not far above prices in some other countries is the total facility and physician costs for cataract surgery, which average $3748 in the United States, lower than the price in Switzerland, and close to the price in Australia and Chile.  Drug prices in the United States are quite high, as we know, with Nexium being an average $193, compared to the next highest Switzerland at $69 and a country like France at $23.  Overall, though, the United States is paying unit prices for health care services and products significantly above those other countries pay.

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