Paying an Arm and a Leg

So many charts, so little blog. Which chart should I show you from yesterday’s release of the latest global comparison of healthcare prices? How about the cost of hip replacements? Here it is:

The “average” number is a little hard to see, so here it is: $34,454. That’s 2x what it costs in Germany, 3x what it costs in France, and 6x what it costs in Switzerland. WTF?

This goes a long way toward explaining why hip replacements are so popular in the United States: they’re a huge profit center for doctors and hospitals. Keep this in mind the next time someone starts going on about how you never have to wait in line for a hip replacement in America. It’s not because our healthcare system is super efficient, it’s because doctors are super eager to perform them.

The full set of cost charts is here, and they’re pretty instructive. You can, if you want, try to make the case that we perform better hip replacements or do better angioplasties than other countries. But appendectomies? CT scans? Normal deliveries? As Aaron Carroll says about the astonishing numbers for routine CT scans and MRIs:

Why does it cost so much more in the US? Does the radiation work better here? Are the scanners different? If you’re wondering, the CT scanner was invented in the UK, so it’s not like there’s some reason to believe our machines are better….Let’s be clear. I have no problem with things costing more when they are demonstrably better. Or, if you’re getting more of them for your money. But a scan is a scan is a scan. There had better be a good reason for it costing more here, and I can’t think of a good one.

This is one of the reasons healthcare costs so much in America. We aren’t getting more for our money, we’re just paying a lot more for the same stuff as everyone else.

POSTSCRIPT: One caveat: the report doesn’t mention how they convert foreign prices into dollars, and it probably makes a difference whether they apply purchasing power parity adjustments. Not a huge difference, but it’s possible that different methodologies would produce modestly different results.

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