Ezra Klein at the Washington Post just wrote an interesting piece on rising health care costs which is posted here. A couple highlights are:
On Sunday, I reported on new data from the International Federation of Health Plans showing that health-care prices are far higher in the United States than anywhere else. An MRI, for instance, costs $1,080 here, but only $280 in France. The main reason, I reported, was that in other countries, the government sets the price and providers take it or leave it.
But some readers thought I missed the boat with that explanation. So let’s go through some of the objections
One common complaint was that I omitted any mention of the medical malpractice system and administrative costs. As one reader wrote, “you fail to address that more bureaucracy, more paperwork and persistent unchecked liability are at the root of price hikes.”
Let’s start with medical malpractice. Its direct costs — premiums, payouts, legal fees, etc. — amount to about one-half of 1 percent of total U.S. health-care spending. It’s barely a rounding error.
In October 2009, in response to a request from Sen. Orrin Hatch (R-Utah), the Congressional Budget Office took a careful look at the evidence on defensive medicine and concluded that aggressive reforms to the medical malpractice system “would reduce total national health care spending by about 0.5 percent.”
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Absent in this conversation, however, is the fact that many medical malpractice lawsuits aren’t frivolous, and the United States actually has a higher rate of medical errors than other countries. One of the most common medical errors occurs when surgeons leave a “foreign body” — a sponge, for instance — inside a patient. According to the Organization for Economic Cooperation and Development, such errors are more frequent in the United States than in any other developed country, except Switzerland and New Zealand.
Overall this is an interesting article on an important topic particularly with the Affordable Health Care Act headed to the Supreme Court this spring. What are your thoughts on the reasons behind rising health care costs?