What is the cost of health care in the US?

Question

I was surprised to read articles about the cost of health care in the US. So, I became interested in this topic.

My question;

• What is the cost of health care in the US?

That would depend on the availability of insurance, but I'd like to get a rough idea.

According to this article (written in Japanese), in the United States;

• If you visit a doctor for the treatment of a cold it costs $1000. (In Japan, it's typically less than $30 if you use insurance.)
• If you transported to the ER it costs over $10,000, (Even in Japan, if you don't have insurance, it could cost this much money.)
• Hospitalization costs $2,000 to $3,000 per night (not including surgery), (If you have insurance, it's about $200 in Japan.）
• Relatively simple surgery, like an appendectomy, costs $10,000 to $35,000 dollars (If you have insurance, $2000 in Japan)
• Surgery for a serious disease can cost more than $100,000.

In addition, you must also pay $400 a month for even cheap private health insurance. If you use this course, all out-of-pocket until your medical bills reach $4,000. A course without a cutoff point would require a payment of $1,300 per month. (In Japan, the cost of an insurance capable of covering reasonable medical care for the entire family should be roughly $300 per month.)

Note;
I am not very good at English. I am sorry if I have used rude or unclear words. Corrections are welcome.

This question was originally posted on the Politics Stack Exchange, but was manually moved here on the advice that the Money category is more appropriate.

Answer 1

The most important thing to keep in mind is that billing in the US healthcare system is utterly insane. Identical procedures and even medication prices can vary wildly in price depending on where you get the service performed and the specifics of your insurance. We aren't talking about small differences here, we are talking about things that can vary by 10's of thousands of dollars. There's no doubt in my mind that someone has gotten, for example, a bill for cold treatment that was $1,000. In fact, some insurers pay the people they insure to obtain their medication or have an MRI done at certain places rather than others, because the cost to them is so drastically different. Or even to go to a different country:

https://www.usnews.com/news/best-states/articles/2018-11-01/utah-insurance-company-is-paying-people-to-pick-up-their-prescriptions-in-mexico

Vox journalist Sarah Kliff did some excellent reporting on billing discrepancies, I highly encourage you to look up her work. Here's some of an interview she did with NPR:

https://www.npr.org/2019/03/13/702975393/why-an-er-visit-can-cost-so-much-even-for-those-with-health-insurance

This is FRESH AIR. I'm Terry Gross. You wouldn't believe what some emergency rooms charge, or maybe you would because you've gotten bills. For example, one hospital charged $76 for Bacitracin antibacterial ointment. One woman who fell and cut her ear and was given an ice pack but no other treatment was billed $5,751. My guest, Sarah Kliff, is a health policy journalist at vox.com who spent over a year investigating why ER bills are so high even with health insurance and why the charges vary so widely from one hospital to the next.

Here is a particularly gross example:

KLIFF: Yeah. So this patient, his name is Justin. He was a community college student in northern California, was walking down a sidewalk in downtown San Francisco one day. And there was a pole hanging off the back of the bus that wasn't where it's supposed to be. It essentially flew off the back of the bus, hit him in the face and knocked him unconscious.

And the next thing he knows, he's waking up at Zuckerberg San Francisco General, which is the only Level I trauma center in the city. He ends up needing a CT scan to check out some brain injuries. He needs some stitches. And then he's discharged. He ends up with a bill for $27,000.

But, you know, as I began figuring out through my reporting, San Francisco General does not contract with private insurance, and they end up pursuing him for the vast majority of that bill. He has $27,000 outstanding. And somewhat ironically, San Francisco General, it is the city hospital. It is run by the city of San Francisco. So this student is hit by a city bus, taken by an ambulance to the city hospital and ends up with a $27,000 bill as a result.

GROSS: So did he have insurance?

KLIFF: He did. He had insurance through his dad.

Having insurance, even good insurance, is not even enough (as this example shows). And what makes it all worse is that is actually very hard to make an informed price decision because it's very hard to figure out ahead of time if your insurance will cover something, and if they will how much procedure x will cost at facility y.

So tldr, your question:

What is the cost of health care in the US?

The sad truth is that it's basically impossible to answer this question. Your ambulance ride might be free. It might be a hundred bucks. It might be literally 10's of thousands of dollars.

https://abcnews.go.com/Health/doctor-56000-bill-air-ambulance-ride-accident-atv/story?id=58125900

Groggy from painkillers, Khan managed to ask the doctors how much the flight would cost and whether it would be covered by his insurer. “I think they told my friend, ‘He needs to stop asking questions. He needs to get on that helicopter. He doesn’t realize how serious this injury is,'” Khan recalled.

Total bill: $56,603 for an air ambulance flight. Blue Cross Blue Shield of Texas, Khan’s insurer, paid $11,972, after initially refusing altogether; the medevac company billed Khan for the remaining $44,631.

This is hardly uncommon -- there are many incidents of people refusing medical services because they are terrified of what the bill will end up being.

Answer 2

The US health care system has many maladies, and the absurd prices are only one effect of it. Most people don't pay those prices, as insurances negotiate the hospitals and doctors down, and the insurances have a lot of power.

The core concept is like this: let's say a procedure costs 40 $ to execute, and no doctor's office can survive on less. The insurance enforces that they pay only 20 $ for it, so the doctors office formally charges 2000 $ - for the majority of customers, they are forced to operate on a loss, and the small number of people that have no insurance (and have money) pay the full 2000 $, covering the losses from all others.

Add to this that the insurance industry uses around 65 % of all premiums to execute their job (which is negotiating prices with doctors, and declining payment requests from patients); only 35% are used for health related cost.

In addition, in the US, anyone can sue anybody for anything. Even if he might lose, the sued party needs to pay their lawyers, and if the suer has no money himself, there is no way to recover those lawyer cost. Combine that with the threat of easily multiple millions of damages if a doctor loses, and you see why every doctor must have malpractice insurance. These insurances are very expensive - for the reasons described - and cost hundreds of thousands per year for a small office.

Furthermore, ERs have to treat anybody that shows up, so they are always overloaded, and if the patients have no money to pay, the ER / hospital has to cover that cost, which - of course - is recovered from paying patients. That explains why an uncomplicated hernia surgery ends up with 70 000+$, and a difficult birth can easily cost far over a million.

As health insurance is not mandatory, and expensive, many healthier younger people don't have any, and just hope all goes well (or go in the ER). This risk 'unmixing' of course contributes also to higher insurance prices.

Update: I have been asked for sources.

• The 65% were from an article that I read years ago; I cannot find it anymore. Here is a link to a newer one that names 34.2%: https://www.healio.com/news/primary-care/20200106/a-third-of-us-health-care-spending-stems-from-administrative-costs
• the 70 000 are from my own hernia surgery. There is a 62 222.00 bill for the surgery itself, plus a 7000+ bill from the executing doctor, plus some smaller others.
• the million for childbirth is from a bill a friend of mine got, for a complicated childbirth. I have no access to the original bill, but I have seen it.
• The 2000 $ is an example taken from a standard lab test (Quest, LabCorp). I annually get a bill for around that amount, reduced by my insurance to 38.97 or so.

The majority of americans still think the US health care is one of the best in the world; not having seen any others, ignoring all international comparisons, and being strongly afraid from any government-pushed changes. This is a part of their understanding of 'Freedom' - the right to chose not to have health insurance, vs any government mandate.

Answer 3

Many of your numbers are exaggerations:

• If you visit a doctor for the treatment of a colds cost ＄1000. (In Japan, it's typically less than ＄30 if you use insurance.)

With my doctor an office visit is $100 without insurance and $10 with insurance. My last prescription for a visit a few months ago was $5 for a 14 day course.

• Hospitalization costs ＄2,000 to ＄3,000＄ per night (not including surgery), （If you have insurance, it's about ＄200 in Japan.）

With insurance it is much lower.

• Relatively simple surgery, like appendectomy, costs 10 thousand to 35 thousand dollars, and (If you have insurance, ＄2000 in Japan)

My son had outpatient knee surgery a few years ago. It was less than $10,000 before insurance and less than $500 with insurance. That included the pre-surgical visit, the surgery, the post-op visit, and 10 physical therapy sessions.

or they are too broad:

• If you transported to the ER costs over 10 thousand dollars, (Even in Japan, if you don't have insurance, it could cost this much money.)

But why are you in the ER: a minor reason? A broken bone? a heart attack? With my insurance it is $250 for the ER. If I go to an Urgent Care it is $100.

• Surgery for a serious disease can cost more than 100 thousand dollars.

Again what surgery?

There are different ways that people get insurance In the United States. The way most people get coverage is though their employer. This disconnects most people from the full cost of the premiums and what the cost would be if they didn't have insurance. In addition the premiums are tax deductible for the employee and the employer.

Other people get insurance on their own, or through government run portals. Depending on their income level there can be government assistance, and/or tax credits.

Medical costs are complex. Some of the numbers you are throwing around mix apples and oranges. Some people pick plans that have a low monthly cost but a higher deductible out-of-pocket maximum. Others pick plans with a higher monthly cost, and lower deductible and out-of-pocket maximum. It depends on what you "know" you need coverage for this year.

The options we have, and the model we will use in the future is nothing but politics. Every part that is swimming in profits will want to protect what they have, everybody drowning in their costs will want to change, and many that are disconnected from the cost just want to keep their doctor.

The issue will always boil down to politics.

Answer 4

I can give one illustration:

Some years ago I had a kidney stone attack while on a trip to Mississippi (from Minnesota). I checked into the emergency room of the local hospital and eventually, after about 24 hours, was given surgery to remove the stone. Everything went pretty well (though I'll admit to being somewhat confused by the procedures there vs back in Minnesota).

Anyway, when I got home and got the bill several weeks later I found that the hospital had given me (and my insurance company) about an 80% discount off the bill total (though note that the surgeon billed things separately).

I actually called the hospital since I thought there must be something wrong -- I can see a 20% discount, but 80% makes no sense. But they assured me that the numbers were correct, and everything went through without a hitch (with my ins co paying most of the remaining 20%).

This made me realize that there was something of a game going on there, with the providers faking higher rates so that the ins co can seem to be getting really good deal for consumers. (And it probably somehow fiddles with the amount the insurance companies claim they pay as well.) I suspect that often this "discount" is hidden, to make insurance clients think they're getting a really good deal.

And I've never been able to find confirmation, but I suspect that a similar game is going on with drug prices. Drug companies jack up the prices ridiculously high, then give insurance companies an under-the-table discount.

Net-net: There is very little transparency in pricing of drugs and medical services in the US. This leads to (sadly) ridiculous inequity in the costs of medical services.

Answer 5

In summary:

Some points from the article are "utterly ridiculous"; some are "unrealistic".

• If you visit a doctor for the treatment of a colds cost ＄1000. (In Japan, it's typically less than ＄30 if you use insurance. )

Utterly ridiculous.

It is $90 to $120. (BUT you get a sharp discount if you are a "cash patient".) With insurance it is $5 to $20.

• If you transported to the ER costs over 10 thousand dollars, (Even in Japan, if you don't have insurance, it could cost this much money.)

This is a huge exaggeration or an extreme case. An ambulance is expensive, maybe 1 or 2 thousand.

• Hospitalization costs ＄2,000 to ＄3,000＄ per night (not including surgery), （If you have insurance, it's about ＄200 in Japan.）

This is the "upper end of the scale". "$1,000" could be more typical.

• Relatively simple surgery, like appendectomy, costs 10 thousand to 35 thousand dollars

That's about right.

• Surgery for a serious disease can cost more than 100 thousand dollars.

Meaningless, many "serious" surgeries (transplants etc) are nominally millions of dollars.

• Insurance

Can easily google some prices: https://www.ehealthinsurance.com/resources/individual-and-family/how-much-does-individual-health-insurance-for-self-employed-people-cost

Yes, it's not unusual to pay 10 or even 15 thousand a year, if you are self-employed, for health insurance for a family. It's a, or the, major cost.

(But don't forget in many countries, the "medical tax" (whatever it is named) from the government can be ~10% or more of your income.)

Drastic "disparity from nominal" of prices in the US system:

As others have explained, it's difficult to "state the price" of medical service X in the US. A hospital system will state "Oh, that is $7,201" - but the number is all-but meaningless. In reality, the hospital will do 1,452 of those procedures in a given year, for, insurance company Y, and, that company will negotiate some price for the procedure - and that number can be utterly different from the nominal "$7,201".