Why is health care for the elderly so much more expensive in America

Great Debates
1

There have been debates on health care costs, how the US pays more for pretty much everything than the rest of the world. But these graphs make me realize a lot of that seems like it can be traced to health costs for those 60+.

http://blogs-images.forbes.com/danmunro/files/2014/04/hccostsbyage.png

http://blogs.denverpost.com/health/files/2012/04/20091213health_care_costs_elderly_412.gif

I think those are from the same study. Up until age 57 health care costs are fairly low for all countries studied (US, UK, Spain, Sweden, Germany), being under 5k a year per capita. But once people push past 60 health costs in the US are many times higher. Between age 57 and 67, US health care costs quadruple while costs in the other 4 countries only grows about 50%.

At age 57, US health costs are maybe 50% higher than Spain, and a little lower then Germany. By age 85 US costs are 8x higher than Spain and 4x higher than Germany.

Is it because the elderly use a higher % of brand pharmaceuticals, hospital services and hospice care, all of which are far more expensive than other nations? I assume our dental costs, generic medications, OTC treatments, primary care, etc in the US are not much more expensive than what you’d pay in France or Canada, but I believe our brand pharmaceuticals, inpatient services and hospitals are 3x+ more expensive. Is it that for the first 60 years of life people only need the first kind of care (primary care, OTC treatments, generic meds, dental care, counseling, etc), in the last 25 people need the second kind (much more inpatient treatments, surgeries, hospice care, etc)?

Also the elderly are covered by medicare, which is a single payer system that has some price negotiations. So the costs would probably be even higher if we had private insurance for the elderly. It doesn’t make sense.

2

Medicare doesn’t negotiate drug prices. They are barred from doing so unlike the VAand Medicaid. That’s a big reason right there why prices are much higher. I also suspect most other counties are just more realistic about death in many ways that save money in the long run.

3

Furthermore, there is almost no subsidy of drug prices by the US government. In most other countries (with a national health system), there is significant government subsidy, so prices of medications are almost always lower. The elderly usually need more medications, so the cost diff probably shows up there.

Furthermore, most countries’ national/provincial health systems dictate prices that medical practicioners can charge, so there is less tendency to gouge the elderly.

4

We pay for things like dialysis for our seniors even though they are not likely to get a kidney transplant.

We pay to keep people on life support even though they will never have another conscious moment in their technologically expendted lives (and if they did, they would probably ask us to pull the plug).

If we could contain our healthcare costs for our seniors, it would go a long way towards solving our short and medium term issues with healthcare. Over the long term, we probably need carousel.

5

My sister is a nurse who did some long term care. In some cases, the widow to be has no choice but to leave her spouse on life support - when he dies her income will be cut by 50 or 60%. So insurance pays for long term care because of the way the pension or Social Security is set up.

My brother in law was not elderly, but the last few weeks of his life cost the insurance company nearly a million dollars because he chose to postpone death as long as it was technologically feasible. We can do a lot to postpone death, but it isn’t cheap.

6

This does not adequately explain the OP’s question. People in other First World countries live as long, and in some cases longer, than people in the United States, and I can assure you in many cases they are every bit as stubborn about not dying. It’s a pretty universal human desire to stay alive.

Why do Canadians live longer than Americans, but more cheaply? It’s probably because the Canadian government negotiates better rates on drugs. It certainly is not because Canadians just accept death; most people fight to the bitter end.

7

Death panels, death panels!

8

American eating and exercise habits may have a fair amount to do with it. All the healthy 70+ people I know are trim and active. All the 60+ people I know with cronic, sometimes multiple, health issues are obese. All the morbidly obese older people I know have multiple chronic health issues.

9

I wonder if other countries do better on the preventative front because of the universality of their health care. So if you’re in one of these countries and you experience a minor but noticeable problem in your40s or 50s, you won’t just shrug your shoulders or pray it off. You’ll go to the doctor to get it straightened out before it develops into a major problem when you’re in your 70s or 80s.

I don’t think this is why costs are so high, though. I don’t think it’s because Americans are fatter and less healthier either. I think the answer is more simple: Healthcare is a big business in the US. It’s easy to nickle and dime someone who is fixin’ to die but doesn’t want to.

10

My understanding is the bulk of why our health care is so much more expensive than other wealthy countries is because of:

[ol]
[li]Administration is far higher here[/li][li]We do not negotiate prices or have transparent pricing for pharma, medical goods, etc. [/li][li]Our system is run on a fee for service scale, so the most expensive services are recommended earlier than they should be[/li][li]We have no comparative effectiveness, so expensive treatments that don’t work or that don’t work better than cheap ones are given all the time (supposedly 1/3 of all health spending does nothing for people’s health in the US).[/li][/ol]

But having said all that, it still doesn’t explain why health care in the US was roughly equal to Germany, UK, Spain & Sweden up until age 57, after that healthcare in the US explodes.

I’ve looked into it, I think dental treatment in Europe & Canada is price comparable to the US. I’m sure our generic medications aren’t much more. I don’t know what an optometrist and eyeglasses cost in Germany, but I’d assume it isn’t much different than in the US.

I think where the big price discrepancies come up are things like surgery, specialty physicians, medical diagnostics, etc. Basically anything to do with a hospital, inpatient setting or branded pharmaceuticals will cost 2-5x more here.

Maybe it isn’t that ‘all’ our healthcare is 50-100% more expensive here. Maybe half our health services are price comparable to Europe, but the other half are 2-4x more expensive and when you average it out it comes to 50-100% higher. Hospitals are 500 billion, pharma is 300. Durable goods, specialty physicians, etc. And maybe the elderly make up the bulk of those services.

If you look at the chart, health care costs at age 57 are comparable for all 5 countries. By age 87, the costs have essentially doubled for Sweden, Germany & Spain and they have quadrupled for the UK. For the US they have grown 1050% from about $4000 to $42,000.

11

I’m sure it’s not that the dying Canadian him/herself accepts death any more easily than a dying American. But I’m not at all sure that the Canadian health care system doesn’t accept death more easily than the American one- I’ve known more than one case where doctors offered treatments that would at best extend life a couple of weeks or months for an already terminally ill patient. Not enough time to make a real difference in average lifespan- but enough time to spend a lot of money. I don’t know if that would happen in Canada or France or Germany.

12

The medical companies in the United States place profit over healing.
A candidate for President who is a physician, I do not recall his name, admitted that health care reform would not work because there was too much money involved.
When folks are going to die, they will pay anything to live longer.

13

Orthopedic surgery to fix accidental injury ain’t exactly cheap, either. Neither is, say, an appendectomy. Accidents and appendectomies, just to name two surgeries, happen to young people too. The first 48 hours of care for my broken leg cost over $5k, in 1996! If you counted all the surgery and rehab, even at HMO-negotiated rates the cost was about $100K. Not a heart transplant, exactly, but much more common.

14

Is nursing home care figured into those calculations? If so, then cultural differences in how the elderly are cared for could account for no small part of those expenditure differences.

My humble guess is that Americans may be more inclined to care for our elderly in a nursing home. Countries where multi-generational homes may be more likely to provide in-home care by family members.

15

Yes. While no-one here is credulous enough to believe in the death squad meme, there does still appear some general feeling that we just let our elderly die in Europe, Canada etc.
But it’s not so; when you look at survival rates for conditions in general and/or conditions that primarily affect the elderly; the rates are very similar. A little worse for some conditions than the US, and a little better for others.
To give you an idea how close the real data is, one example used in the US was that the 5 year survival rate for prostate cancer was twice the value in the UK. Except, it turned out the stats for the two countries were calculated in different ways, and when you do a like for like comparison, the rates are almost exactly the same.

<slightly off-topic>
And actually, while the US is arguably the worst for this, there’s big scope for improvement on this across the world. Many countries have bought into the idea that because healthcare is life and death it’s too important to have an open, transparent market and allow new competitors to enter.

My company makes a kind of medical device. There is no pressure on us to push down prices; how good a relationship we have with hospitals and governments is far more important.
And each year we add some new feature to the device and say to hospitals that they can have last year’s device for X or the new version for 2X. Hospitals everywhere (even in the developing world) opt for the new version, even if the new feature has little to no clinical benefit.

16

This is just one tiny example, but I think it gives a bit of insight into just how screwed up the system is, and how it leads to greater expenses in the interest of saving money.

To receive the Medicare Home Health benefit, the person must be a) homebound and b) have a “skilled” nursing or rehabilitation (physical therapy, occupational therapy, speech therapy) need. This need must be, in essence, something that the professional went to school to learn. Everyday medication administration or set up, routine wound care of non-infected wounds, taking vital signs and assisting with bathing, feeding and dressing are not considered “skilled needs”. Performing therapeutic exercises (after the establishment of a routine) are not considered “skilled needs.” And if there is no one else available - no caregiver or family member or friend or church member willing or able to do it - to perform these sorts of services, it doesn’t matter. Still not a skilled need. These are considered “custodial care” and not covered.

It sounds reasonable on the surface - why should we be paying a professional nurse or therapist to do what isn’t really a professional skill? But it leads to some unexpected issues and *increased *costs:

I have a patient who has crazy high blood pressure and blood sugars, and she also has dementia with problems remembering stuff. I can come in and evaluate her (skilled need) and assess her condition (skilled need) and then I can teach her about her medications (education is a skilled need) and diet (skilled need) and take her blood pressure every week to evaluate whether she’s possibly entering hypertensive crisis and notify her doctor (skilled need) and teach her and her husband (also with dementia, by the way) what the alert values are for high blood pressure and blood sugar and when they should call the doctor and when they should call 911 (skilled need) and while I’m there, I’ll fill her pill organizer (not a skilled need), because neither she nor her husband can do it correctly despite the written medication lists and instructions I’ve given them. Let’s say all of that takes me 9 weeks, which happens to be the same as the Medicare home health certification period maximum. To Recertify the patient for more home health, I’ve got to have skilled needs documented, but…I’ve run out of skilled needs. I know that without me there to fill her medication organizer once a week (not a skilled need; anyone can fill a pillbox, that doesn’t take a nurse) and remind her to swap the beans for the white rice and drink the Diet Pepsi, not the regular… she’s going to forget to take her medicine and forget what (not) to eat, and she will go into a hypertensive crisis, or have a stroke or a heart attack - or maybe her high blood sugars will put her into diabetic ketoacidosis first, who knows? But I do know that she’s going to be taken to the hospital by ambulance into the ER and admitted, at least for observation, within the next 2 months. Seen it a hundred times.

We’re going to pay for a $30,000 hospital bill because we aren’t willing to pay me $60 a week to prevent it (okay, my boss probably makes more from Medicare than I do - but still far less than for hospital care). THEN, because they’ll have changed her medications and maybe given her a new diagnosis, and because she’ll be more impaired than she is today, I’ll be able to reopen her case and resume weekly nursing visits for a while again.

So it costs us (Medicare) more, it makes the patients worse, and it makes the doctors angry with us that we discharged them from home health. Literally no one is happy with this, but no one’s willing to change it, either.

17

Apparently, the chart linked to in the OP is misleading. The US still spends a good deal more on healthcare, but that money is spent across the board, so the spike that occurs is not accurate. This is apparently because of some of the problems with the underlying data, the cherry picking of countries being compared, and the fact that it only includes public spending. Here is a paper that compares the age distribution of healthcare spending.

18

Medical care in the US is a for profit proposition in most cases, and there is a group of people somewhere in there, if not at every single stage, whose capitalistic objective is to maximize profit. They would be doing their shareholders a disservice and breach of duty if they did not try to maximize profit. Other developed nations have removed the obligation to profit from medicine.

The benefit of the for profit system is that the medical care in the United States is the best in the world. For profit.

19

…from some parts of healthcare.
As I alluded above, there are obviously plenty of companies making juicy profits even within UHC countries, and indeed plenty of inefficiencies. The difference is just that there are fewer such layers, and generally less bureaucracy.

Cite?
I don’t think many people would argue that the very best medical care in the US is amongst the best in the world. But your claim is much stronger than that.

20

Please read my next sentence after that. Then the two together. It is best for the purpose of profiting.