There is completely a different mindset between the US and Canada with regards to healthcare. In Canada, healthcare is regarded as a public service, like roads & bridges, police, etc. In the US, healthcare is regarded as something that is a benefit from having a good job (or a lot of money). I’ve lived under both systems, and I can tell you, if you have good insurance and live in a place well-endowed with medical facilities, the US wins hands down. However, there are costs, and not all of them are obvious.
Last year I had a pinched nerve. My doctor (who is a Canadian in exile, like me) figured that out using a hammer and testing my reflexes, then backed that up (30 minutes later) with nerve conduction testing (which in itself isn’t cheap). However, my doctor wanted an MRI to be certain. His secretary called the MRI clinic, and after a few seconds of talking to the clinic, the secretary turned to me and asked “would you like tomorrow morning or afternoon”? When I told family members back in Canada, they asked me when I became a sports star. In Ottawa, the wait for a non-emergency MRI is 5 months, in Toronto 3 months. The cost here is twofold: overdiagnosis and overcapacity.
If there was a long wait for MRI, my doc most likely would have been satisfied with his initial diagnosis without the need for “toys”. Even the nerve conduction testing was probably superfluous. I have a number of friends who are foreign trained doctors, from places like Japan, South Africa, and Russia. Like all foreign trained doctors (except Canadians!), to work in the US they had to do a residency in the US, on top of the one they did in their home country. They all say that training in the US places an emphasis on “toys” rather than simpler, low tech diagnosis.
If the MRI was available both tomorrow morning and afternoon, want to make a guess as to the utilization of the MRI? When I was in the office (morning, btw), there was nobody in the waiting room when I left, so presumably the MRI sat unused for a time. If California has 400 MRIs at 50% utilization, and Canada has 171 MRIs at 100% utilization, you can still say there is a shortage in Canada (which there is), but the extent of the shortage isn’t so bad as the raw number of machines would indicate. The wait time in Canada is for non-emergency – if it is an emergency, you’ll get your MRI as quick a I did.
Another cost, as many people have pointed out, is lawsuits, which manifest themselves in the medical industry as malpractice insurance. A friend of mine is a oncologist, but she chooses to do other things than practice medicine. One reason is that malpractice insurance would cost $80,000. Another local doctor (a gerontologist, not a high-paying specialty) has seen his malpractice insurance jump from $5,000 to $10,000 to $30,000 in the past 3 years. Insurance for neurosurgeons can cost $250,000. Radiologists have very high insurance rates, too, because evidence that they screwed up is right there on film. I know a high-risk ObGyn who specialized in things such as pregnant teens (and occasionally pre-teens). One of his patients, a young adult, was poor, pregnant, and had a medical condition where pregnancy could be fatal, for her. The only option in this condition is termination (abortion). This Ob-gyn doesn’t usually do abortions, but voluntereed his time and asked others involved to do the same. Everything went fine. A few months later, he was sued by this young lady.
Billing and administration are another cost. I’ve only live in two places in the 8 years I’ve been in Cleveland. I’ve had the same insurance for the past 5 years, from the 2nd largest health insurer in the country. In the time that I’ve been here, I’ve had 7 bills go to collection, simply because the hospital or doctor group was incapable of billing my health insurance properly, or incapable of fixing a billing issue. Sending a bill to collection costs the hospital a lot of money (typically 50% of the amount owed). Part of the problem is that hospitals try to save money by outsourcing their billing, which is then handled by high school dropouts in West Virgina (or other low-wage states). If they did billing in-house, their percentage of collection would go up, but the increased cost of hiring people with adequate experience would wipe out any gain. I found this out by talking to the head of billing at one of the local 1000 bed “world class” hospitals (yes, there are two of these here, within walking distance of each other – another overcapacity nightmare).
Research, as others have pointed out, hardly matters in health care costs. Research budgets generally come from government or industry grants, and are a tiny percentage of overall health costs. However, health research is a large industry in the US. In Cleveland alone, there are 3 major research centers (Case medical school, University Hospitals, Cleveland Clinic), and a few other hospitals have smaller research programs (VA Hospital, MetroHealth). Total annual NIH (National Institutes of Health) research grants to Case medical school is in the ballpark of $170 Million. Cleveland Clinic spends about $80 million a year in research (with about 90% of that coming from external grants). Many of the foreign doctors I know were attracted here by the research funding. Even with all that money, Cleveland is only in the top 10 in terms of health research funding.