In June 2016, a 45-year-old woman was fall in an accident at a train station in Boston, USA. When she got off the train, her legs got stuck between the train and the platform. This caused severe wounds in her legs, and the bones came out. At this time, she was crying in great pain. But the pain in her feet isn’t the only reason why she was crying. People in the area rescued her and tried to call an ambulance to take him to the hospital. But then the woman stopped them. Said ambulance costs a lot, which she can’t afford.
During excruciating pain, her longing went viral through social media. The question arose about the excessive cost of the medical system. The New York Times published an editorial on the incident. In a country like India and Bangladesh, where it is possible to perform laparoscopic surgery at a government hospital for only $0.5. surprisingly, American medical expenses have skyrocketed despite being such a developed country. The fact that the Americans themselves cannot afford them is proof of that. Let’s find out why it’s so expensive.
Health insurance system
The medical system in the United States is different and complex compared to other countries. There, the health sector is seen as a multi-billion dollar business rather than human welfare. And this business is from their various health insurance. Insurance companies work to reduce medical expenses. There are currently three types of health care in the United States. These are government insurance, private insurance and a few voluntary organizations. Government insurance includes Medicare and Medicaid.
Before Medicare and Medicaid, there was no health insurance system in the United States. Then Blue Cross and Blue Shield would arrange insurance for medical needs. But they were non-profit organizations. They did not work to reduce medical expenses. They only provided financial assistance in case of an emergency. After World War II, employers offered American employees the opportunity to arrange insurance for their treatment. Then the amount of insurance began to increase. Between 1940 and 1955, 10% to 60% of the American population came under health insurance.
This massive demand for health insurance gives business opportunities. So, then the commercial companies moved into the insurance business. In 1951, ‘Aetna & Signs’ was the largest insurance company. In 1965, President Johnson announced Medicare and Medicaid, two health insurance companies. Medicare works with patients aged 65 and over. On the other hand, Medicaid works with needy patients. The rest have to take treatment in the private insurance system.
Today, 90% of Americans have access to health insurance. If someone does not have insurance, it is never possible to cover medical expenses unless he is a wealthy person. Because those who have insurance, they also have to struggle to meet the medical expenses. The type of insurance work is also very complex. Let’s take a brief look at how they work.
Any insurance has several parts. These are premium, Deductible, component, and coinsurance.
In private insurance, you have to deposit a certain amount of money every month. The guarantees come in different plans. Some have a higher premium, and some have lower. Some services are available for free due to premium payment, such as- vaccination, diabetes checkup, breast screening, etc.
A deductible is a certain amount of money that you have to deposit before you can get help from insurance. For example, you need surgery to break your leg in an accident. Now you have to pay some part of the amount of money you need for the insurance company in advance. The insurance company will pay some of the remaining cash after you pay. What you paid before the insurance company paid for you is deductible.
Deductibles usually come in different numbers. You have to choose any one of these. Often a certain amount of money is paid as Deductible every year. There is again a premium relationship with Deductible. The higher the premium, the lower the Deductible, and the lower the Deductible, the higher the premium. Usually, those who have long-term diseases, such as diabetes, spend more on premiums. Then their Deductible is less.
Insurance will cover the rest after paying the Deductible. But the Insurance company will not do it alone. “I will take something from you from here too. You will have to pay some percentage of the cost of your treatment after Deductible.” This type of policy is coinsurance.
Can take coinsurance after paying Deductible. In some cases, a certain amount of money can be taken without calculating the percentage. This is called Copayment. Usually, the payment for a visit to the doctor is taken in Copayment.
So it is apparent that health insurance is a very complicated process. And the amount of money you have to spend on insurance is much higher. After a major treatment, the patient gets a long list of bills from the hospital. And paying this bill has become a nightmare for many.
Reasons why medical services are expensive
In March 2018, the Journal of the American Medical Association published a research paper. The Harvard TH Chan School of Public Health, The Harvard Global Health Institute, and the London School of Economics compare the medical systems of 10 more developed countries with the United States based on international data from 2013-16. It shows that the cost of medical care in the United States is much higher than in other countries, the results of treatment are worse than others, and the number of people in the United States receiving treatment is lower than they are. Research has found some reasons for expensive treatment.
The study found that hospitals’ administrative costs in the United States account for 8% of the total medical costs. In other countries, it is not more than 1-3%. The reason for administrative expenses is different insurance systems. In addition to Medicare, Medicaid has different procedures for different insurance. So the hospital has to do the work of making the bills of the patients differently. This shows that doctors or hospitals spend more time on administrative work than treatment.
The excessive price of medicines is also the reason for high medical expenses. The per capita expenditure on pharmaceuticals in the United States is $1,443. The average per capita spending in other countries is $749. The cost is $939 in the nearest Switzerland. Surgery and diagnostic tests are also more expensive than in other countries.
In 2013, the average cost of heart bypass surgery in the United States was $75,345. In the Netherlands and Switzerland, the costs were $15,742 and 36,509, respectively. MRI costs $1,145 in the United States and Australia 350 USD. The high cost in these sectors is that they are used for research and quality improvement. But researchers do not find this explanation satisfactory.
Moreover, doctors allow more diagnostic tests than necessary. Many times, doctors know that the disease is specific, but they give it because they are always under pressure to sue patients. So that they can present written information to the court, this increases the cost to the patients.
Another reason for higher medical costs is the higher salaries of doctors and nurses. In 2016, the average annual income of a general physician was $2,18,173. Compared to other countries, the salaries of American doctors are almost double. Doctors in Sweden and Germany earn $86,407 and 1,54,126, respectively.
For these reasons, Americans rarely go to the doctor for treatment. If someone has to be hospitalized, they try to leave as soon as possible because staying in the hospital for one-night costs a lot.
Let’s end with that woman from Boston. If an ambulance takes a patient within the city of Boston, it will cost a lot. So it was not unreasonable to stop him from calling an ambulance. They have to do a lot of calculations with every such thing in the health sector.
The medical system in America is very advanced, and their doctors are also very qualified. But for the average American, self-medication is a considerable burden. In other countries, where there is an integrated medical system, the diversity of health insurance in the United States has complicated the medical system.
Attempts have been made to integrate it at various times, but insurance companies have not opposed this. Experts are working on how to bring these costs within reach of the general public. However, it can be said with closed eyes that it is not changing very fast.