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Why Is U.S. Health Care So Expensive? Some of the Reasons You’ve Heard Turn Out to Be Myths
“We know we spend a lot more than everyone else, and we have looked for easy explanations — things like greed in the system, fee-for-service medicine, overutilization,” he said. But the research, he said, didn’t match his expectations. “I’ve been looking at other countries and seeing there’s a lot of fee-for-service in other countries, and other countries are struggling with overutilization.”
Health Care Spending in the United States and Other High-Income Countries
"The data also suggest that some of the more common explanations about higher health care spending in the United States, such as underinvestment in social programs, the low primary care/specialist mix, the fee-for-service system encouraging high volumes of care, or defensive medicine leading to overutilization, did not appear to be major drivers of the substantially higher US health care spending compared with other high-income countries. Instead, the data suggest that the main driving factors were likely related to prices, including prices of physician and hospital services, pharmaceuticals, and diagnostic tests, which likely also affected access to care. In addition, administrative costs appeared much higher in the United States. These findings indicate that efforts targeting utilization alone are unlikely to reduce the gap in spending between the United States and other high-income countries, and a more concerted effort to reduce prices and administrative costs is likely needed."
Bottom line: Administrative costs including site of service differentials, and health-system based revenue arbitrage are driving up costs not private practice doctors. If you're "feeding the machine" and fluffing hospital admins by doing E/M visits in HOPD venues, doing simple IPM procedures in hospital OR's, ordering urine tox's for your hospital-owned de-prescribing clinic YOU are the problem. The patient's EOB's prove it.
“We know we spend a lot more than everyone else, and we have looked for easy explanations — things like greed in the system, fee-for-service medicine, overutilization,” he said. But the research, he said, didn’t match his expectations. “I’ve been looking at other countries and seeing there’s a lot of fee-for-service in other countries, and other countries are struggling with overutilization.”
Health Care Spending in the United States and Other High-Income Countries
"The data also suggest that some of the more common explanations about higher health care spending in the United States, such as underinvestment in social programs, the low primary care/specialist mix, the fee-for-service system encouraging high volumes of care, or defensive medicine leading to overutilization, did not appear to be major drivers of the substantially higher US health care spending compared with other high-income countries. Instead, the data suggest that the main driving factors were likely related to prices, including prices of physician and hospital services, pharmaceuticals, and diagnostic tests, which likely also affected access to care. In addition, administrative costs appeared much higher in the United States. These findings indicate that efforts targeting utilization alone are unlikely to reduce the gap in spending between the United States and other high-income countries, and a more concerted effort to reduce prices and administrative costs is likely needed."
Bottom line: Administrative costs including site of service differentials, and health-system based revenue arbitrage are driving up costs not private practice doctors. If you're "feeding the machine" and fluffing hospital admins by doing E/M visits in HOPD venues, doing simple IPM procedures in hospital OR's, ordering urine tox's for your hospital-owned de-prescribing clinic YOU are the problem. The patient's EOB's prove it.
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