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International Federation of Health Plans Comparative Price Report

By April 24, 2014April 28th, 2014Commentary

There are frequent reports about how much unnecessary and inappropriate utilization there is in the United States, with the inference that this is the primary source of our health spending issues.  A regular International Federation of Health Plans report, however, strongly suggests that it is differences in unit price that account for most of our per capita spending in excess of our countries.   (IFHP Report)  The report compares the United States with Canada, England, Australia, New Zealand, Argentina, Spain, the Netherlands and Switzerland.  There was an added focus on specialty drug costs in this year”s report.  Enbrel, a drug to treat rheumatoid arthritis, has an average cost in the US of $2,225, but in the next highest country, Canada, it is only $1646 on average and in Switzerland the cost is $1017.  Another high cost drug is Gleevec, which treats various forms of cancer.  It is an average of $6214 in the US, $3633 in Switzerland, and only $989 in New Zealand.  Even common drugs show a wide range of difference, with the US always being the most expensive; Cymbalta, used to treat psychological problems, averages $194 in the US; $110 in Canada, the next highest; and $46 in England, the lowest.  Nexium, a very common acid reflux drug, is $215 in the US, almost ten times higher than the $23 averaged in the Netherlands.   Diagnostics are similarly significantly more expensive in America.  An angiogram averages $907 in the US, $818 in Argentina and $174 in the Netherlands.  MRIs are $1,145 in America, $1005 in New Zealand and $138 in Switzerland.

Basic services show a similar range.  A day in the hospital averages $4,293 in the United States compared to $2,491 in New Zealand and $481 in Spain, which had the lowest average cost.  A normal delivery is $10,000 in the US, $8307 in Switzerland and $2,237 in Argentina.  Cataract surgery is one procedure where the US is close to highest, but not quite.  Australia leads at an average $3841, with the US next at $3762 and Argentina again the lowest at $1038.  Knee replacements are fairly expensive in a number of countries.  America is first at $25,398, but Switzerland, Austalia and New Zealand all average over $20,000 for the procedure.  For bypass surgery, however, the gap is fairly significant at an average $75,345 in the US, followed by Australia at $42,130 and Netherlands bringing up the rear, $15,742.  The data for the United States appears to include all types of payers, including Medicare and Medicaid but it is not clear how it is averaged–what the weighting is.   It is interesting to observe the differences among countries for different treatments–some countries appear to have emphasized controlling some types of spending more than other types.  But it is quite clear that most countries, some of whom have per capita incomes close to or above those in the US, have figured out how to deliver services at a lower cost than in the US.

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