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The Latest IFHP Report on Comparative Health Prices

By October 1, 2015Commentary

The United States has higher per capita health spending than other developed countries because it has higher unit prices; I never tire of trying to make that point.  All the effort that goes into addressing supposedly excessive inappropriate utilization in this country largely misses the point.  Care management can be important, especially if it improves patients’ health status, but finding ways to lower unit costs is necessary if we are to reduce our spending.  If you have difficulty accepting that, just look at a few examples from the International Federation of Health Plans, based on 2013 prices.    (IFHP Report)   Lets start with drugs, since that category is currently driving our spending acceleration.   Enbrel, an expensive autoimmune disease drug–$2225 on average in the US, Switzerland is the lowest among the comparator countries at $1017, while Canada is next highest to the US at $1646.  Gleevec, a cancer drug, $6214 in the US, lowest price is in New Zealand at $989, next highest is Switzerland at $3633.  Copaxone for multiple sclerosis; $3903 in the United States, next priciest is Switzerland again, $1357 (or one-third the US price) and lowest is England at $862.  Now lets look at some very common drugs.  Cymbalta, and anti-depression medication, $194 in America, $110 in Canada, $46 in England (or one-fourth the US price).  Finally, Nexium, for heartburn, $215 in the US, $60 in Switzerland, $23 in the Netherlands (one-ninth the US price).

Maybe its just drugs?  How about some diagnostics?  Angiogram, $907 in America, next highest, Argentina at $818, lowest Netherlands at $174.  Abdominal CT scan, same pattern, US $896, New Zealand $731, Spain $94.  MRI, $1145 in the United States, $1005 in New Zealand and $138 in Switzerland.  How about hospitals and some common procedures requiring hospitalization?  Average hospital cost per day–America, $4293, New Zealand $2491 and the lowest is Spain at $481.  You are beginning to see why international medical tourism can be attractive.  How about normal childbirth, hospital and physician charges–$10000 in America, $8300 in Switzerland, a mere $2237 in Argentina.  Now here is the only one in the report where we aren’t the highest–hooray!!  Cataract surgery, total charges, United States at $3762, Australia, for shame, is pricier, $3841 and Argentina the laggard at $1038.  Hip replacement is close, US $26489 for hospital and physician cost, Australia $26297, Argentina $6862.  Bypass surgery, US $75345 for all charges, Australia $42130 and Netherlands, $15,742 (about a fifth the US charge).

There are methodological quibbles–it’s not all payers averaged out and pricing may not be completely comparable, maybe there are complexity of patient effects, but the order of magnitude differences are clear.  And if you went back and looked at these reports over ten years, the pricing differences aren’t getting smaller.  So our attention properly is on things that might lower unit cost, from bundled pricing to telemedicine to onsite or retail clinics.  But don’t hold your breath for big changes, the political power of physicians and hospitals is high and they want to preserve their income.

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