American pay more for healthcare than other developed countries. That’s not new to me, but the explanation for this does raise some eyebrows.

Andrew Mollica and Anna Wilde Mathews, writing for The Wall Street Journal, gives us a breakdown of the costs for healthcare in comparison to other peer nations. For instance, a total hip replacement in the U.S. is approximately $29,000 while in peer nations it is $10,000. Total knee replacement costs $26,000 compared to $11,000. Robotic prostatectomy is $24,000 versus $11,000, and spinal decompression is $21,000 compared to $7,000. Even having a baby by C-section costs $14,000 versus $4,000. These are just a few examples.

These authors say insuring a family for healthcare costs about $27,000 per year. The main cause: Prices are far higher in the U.S for the same medical products and services, from surgeries to drugs. Here is a breakdown of the reasons healthcare costs more in the U.S.

• Prescription drugs cost a lot more in the U.S.
  • Americans pay three to five times more than other nations
• Big hospitals can charge higher rates because of consolidation
  • Consolidation reduces competition which allows higher prices
• The U.S. spends far more than other countries on administration
  • We spend more on the delivery of care
• Labor costs are higher
  • We pay our healthcare providers more
• American are using more healthcare
  • Utilization is up due to rising age of the population

These are the issues raised by these authors. I have some observations of my own.

• The decline of private practice
  • More and more doctors are being employed by hospitals. That allows hospitals to charge more for the same services that these doctors perform in their offices since the billing goes through the hospital and insurance pays more to hospitals.
• Advances in technology
  • Americans pay more but they also have access to the best medicine in the world. The advances in technology and procedures costs more but the patients benefit from these improvements in treatment.
• The high cost of healthcare insurance
  • Healthcare insurance costs more than it should. You can thank the Affordable Care Act (a badly named legislation) for that. It requires all patients to have coverage of all basic procedures, regardless of need or gender, and therefore artificially raises the costs of insurance. This can be improved through new legislation but Democrats don’t want to admit ObamaCare is a failure.

It is true Americans pay more for healthcare but it doesn’t have to be that way. President Trump has made strides in reducing the cost of prescription drugs and more legislation is needed to bring down the cost of healthcare insurance. We will always pay more if we have access to the best medical practices in the world. We don’t want to go the way of socialized medicine, as some countries have done, just to lower the costs of healthcare.