In the U.S., an angioplasty costs $32,000. Elsewhere? Maybe $6,400

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Why does health care cost so much more in the United States than in other countries? As health economists love to say: “It’s the prices, stupid.”

Americans continue to struggle to pay high and often unpredictable medical bills that accompany trips to the hospital, and, while politicians lament the problem, it's worth looking at how expensive the prices for medicine and procedures are in the United States relative to the rest of the world.

The International Federation of Health Plans, a group representing the CEOs of health insurers worldwide, publishes a guide every few years on the international cost for common medical services. Its newest report focuses on prices as of 2017. Every time, the upshot is vivid and similar: for nearly every procedure on the list, the difference in costs between the United States and everyone else is huge. 

Patients and insurance companies in the United States pay higher prices for medications, imaging tests, basic health visits and common operations. Those high prices make health care in the U.S. extremely expensive, and they also help to finance a robust and politically powerful health care industry. This means that lowering prices will never be easy. 

For a typical angioplasty, a procedure that opens a blocked blood vessel to the heart, the average U.S. price is $32,200, compared with $6,400 in the Netherlands, or $7,400 in Switzerland, the survey finds. A typical MRI scan costs $1,420 in the United States, but around $450 in Britain. An injection of Herceptin, an important breast cancer treatment, costs $211 in the United States, compared with $44 in South Africa. These are just a few examples.

There are so few cases where the United States price isn’t the highest that when you see one, one can't help but do a double take to make sure you have read the information right. Cataract surgery costs more in New Zealand; Kalydeco, a new drug for cystic fibrosis, costs more in the United Arab Emirates. But for most of the studied cases, prices for services and drugs in other developed countries are less than half of those in the United States.

“It is staggering how much the United States is more expensive,” said John Hargraves, the director of data strategy at the Health Care Cost Institute, a group that aggregates claims data from several large U.S. insurance companies and provided the U.S. data to the study.

The international survey focuses on prices paid by private insurance companies; in many countries, public health programs pay less, meaning the gap in prices for many countries may be even larger if it took account of every patient. The survey doesn’t have information from every country, nor detailed prices for every medical procedure. Drug prices do not include rebates people receive after buying a medicine. But the report’s overall message is clear. Prices in the United States are higher for nearly everything — by a lot.

Researchers at Harvard conducted a study last year of things that make health systems in developed countries different from one another. They found that the United States is distinct in a few ways. But the overwhelming finding of those researchers was that this huge gap in prices, more than any other single factor — not the number of doctors’ visits, hospitalizations, quality of medical services, or differences in social service spending — that helps explain why the United States is such an expensive place to be sick.

Over the past ten years, most of the political health policy debate has been about how to ensure that more people have insurance coverage (another way the United States is unusual is in having so many residents without any form of health insurance). But the debate among candidates for the 2020 presidential race has begun to tack slightly toward policies that will address price as well.

The single-payer plans Sens. Bernie Sanders and Elizabeth Warren have proposed would use a large government insurer to set prices for all medical services. Both campaigns assume substantial savings would result as that government system lowered prices across the board: for doctors, hospitals, medical devices and drugs.

Even plans considered more moderate, like those from Pete Buttigieg and Michael Bloomberg would impose some controls on health care prices, by limiting the amount that doctors and hospitals could charge in the situations where they typically charge the most.

President Donald Trump, too, has pushed forward with an initiative to lower prices: Through an executive order and regulation, he is seeking to require health care providers to publicize the prices they have negotiated with insurance companies. The idea is to promote more competition through transparency, although researchers are divided on whether the measure will work. (He has also worked with bipartisan legislators to eliminate surprise billing, which occurs most commonly in medical emergencies at hospitals, though that effort has stalled.)

Higher prices are not new for the United States, but they have become newly salient, as more health insurance comes with high deductibles and other forms of cost sharing that require patients to pay a larger part of the bill or even the full cost of their care. The overall upward creep of prices has also led insurance premiums to rise, taking a bite out of tax revenue, wages and corporate profits, too.

There’s also been some recent interest with Republicans and Democrats alike in taking on drug prices specifically — although few policies have gotten very far in Congress.

Any successful effort to tamp down U.S. prices, of course, will mean reducing someone’s paycheck. The uniquely high prices for drugs in the United States help the pharmaceutical corporations make money. The high prices paid for hospital care keep large research hospitals and small rural providers afloat. The high prices help doctors pay off extensive education debt — but also help place them among the highest-paid professions in our economy. None of those groups particularly want a pay cut.