Orthopedic Surgery is Cheaper in
Belgium, a country with “Socialized Medicine” than the USA
Kudos to the Seattle Times for outing the medical device supply mafia
in their August 5th story on a patient who was able to save money for
his hip replacement by going to a European country with a national health care
system. And low and behold, this story was front page news for today’s New York
Times.[1]
Here are the facts, the federal government, through the CMS or Centers for
Medicare and Medicaid pay for most of the hip replacements in the United
States. This is a multi-billion dollar industry which generates huge profits
for a few companies in Indiana. How can a device that costs $350 to produce be
sold for $3,000 to $4,000 in the U.S. market? The answer is, because we allow
it. Medical device manufacturers, including cardiac devices and others are all
guilty of price gouging in this country, because as a people we have not demanded
that our government funded health care plans pay a reasonable cost (say cost
plus a percentage) for products and services purchased for enrollees.
Price Gouging Medicare
Americans should be outraged that someone can go to Belgium, pick up
some luxurious chocolate (sorry Hershey’s no comparison), spend more than a
week in an inpatient facility and spend only $16,000 versus $60,000 or 63% less than the same procedure and
the same hip device would have cost in the United States. Of course in the
states this total bill also includes layers of mark-ups and marketing,
including hospitals, and clinicians, but in this case, the surgeons are the
least guilty. There is a wide variation in the hospital charges for a hip
transplant across the United States. Why do we allow this gouging of our
federal coffers? The answer is simple, political lobbyists who spend all day
every day greasing the skids in the beltway. And this matter was made even
worse with the “super pacs” which allow the ubber rich to contribute unlimited
amounts to political campaigns. And who might some of these super rich people
be, well, as it turns out, all three executives of the artificial hip makers
each earn eight million dollars a year. They are paid this handsomely to make money
for their shareholders, not to deliver the most affordable health care for device
users. Top executives of these for-profit companies are paid based on short
term shareholder returns and they have little incentive to lower the price of
their devices. In Europe, executives do not receive these ultra compensation
packages and thus do not have perverse anti-consumer incentives to over charge
their countrymen for products.
Pack Your Bags
In my previous experience researching ways to reduce the cost of
cardiac devices I discovered those suppliers have a black box, crash tested
cartel around their pricing of devices as well. All of this is geared to keep
competitors of lower-priced devices out of the picture and profits high for the
few. None of this means you are getting better health care, just more expensive
health care, as the entrepreneurial health care purchaser, formerly from
Washington State figured out. If the government is unwilling to use its bully
pulpit to negotiate with medical device suppliers for lower prices for Medicare
and Medicaid, then at least have CMS approve the reimbursement of procedures
performed at International Joint Commission approved facilities off shore.
Clearly, if it is less expensive for our citizens to go outside the country for
health care, Medicare and Congress need to address this inequity.
Health Care Reforms Attempting
to Address the Concern
There is a faint glimmer of hope in this tunnel, with the launch of PCORI, or Patient
Centered Outcomes Research Institute, under the health care
reforms in 2010. PCORI is a federal agency that was created to look at
system-wide health care inputs and data to figure out how to cut costs and
improve patient outcomes for the country, namely Medicare and other federally
funded programs.[2]
The Patient Protection and Affordable Care Act initiated a sixty-day payment
delay for medical device suppliers, so that Medicare can analyze abusive
practices, which is needed. Additionally, the reform mandates added a 2.3% tax
on medical devices to fund some of the PPACA mandates, like health care subsidies to
buy insurance. Of course the medical device industry is trying to get that
repealed.
The current free-for-all cartel
environment of charging as much as you can to the U.S. health care system and only
offering discounts to foreign governments who use the same devices has to stop.
Since I see no effort on the part of the free market in this country to lower
prices for medical devices or more effectively negotiating device payments by
CMS (your government and the largest health care purchaser in the nation), I say
it’s time to pack your bags.
Take Action
For Americans who want to learn more about accessing health care
abroad, go to Chapter 10 of Unraveling U.S. Health Care and learn how to find a
safe facility for your surgery abroad, whether it is in Europe, Latin America,
or Asia.
And this is the health policy maven signing off.
This article was written by Roberta E. Winter, an independent health
care consultant and journalist and author of a guidebook on the U.S. health
care system. Feel free to share this article virally.
