Michael Shopenn needed a hip replacement. His options were pay $65,000 out of pocket for all expenses at a U.S. hospital, or $13,660 in Brussels. His insurance wouldn't cover the cost, due to a pre-existing sports injury. Even though prosthetics for his condition only cost $350, the markup is incredible for everything else. The fact is, nothing stops companies and hospitals from these insane markups, and people will pay the cost due to necessity.
With the rise of people needing or wanting joint replacements, these companies are only going to be able to gouge prices more and more, especially since none of them are willing to undercut the other.
This article really opened my eyes to how bad things have gotten in the United States. You always hear how bad things are, but being able to put actual numbers to the inflated prices (10,000% markups) really opens your eyes. And these companies don't feel any remorse. An executive for one of these companies argued that "the best way to reduce the cost of joint replacement surgery was to rescind the tax and decrease government interference" (Rosenthal). Except the tax was only 2%, and government interference is already minimal. The cost in Brussels is significantly less, and they use government regulation for healthcare.
This article was published in 2013, and as recently as 2015, these prices have not changed for the better (Japsen). I think without regulations, these prices will only continue to get worse, as these companies are aiming for double digit growth every year, which isn't sustainable with lower prices. Worse, the companies still aren't putting their gross profits into R&D, which only accounts for 5% of their overall spending. These replacements aren't improving, and haven't had any breakthroughs in decades, yet keep getting more expensive (female specific replacements were actually more expensive, even though they use less material).
With an aging population, we are going to start seeing a mass exodus in either personal bankruptcies due to necessary joint surgeries, or vacations to other countries for more affordable care.
With an aging population, we are going to start seeing a mass exodus in either personal bankruptcies due to necessary joint surgeries, or vacations to other countries for more affordable care.
I was rereading Dr. Rosenthal's book chapter on "The Age of Medical Devices" - there is quite an interesting history there, especially for joint replacement. One section read, Joints Are a Big Business (but Don't Expect a Warranty). Let's just say the medical device makers are now in the business of making money. There is a long history here of different classes of devices that needed various levels of approval. I won't go into that now. But suffice to say, device makers rarely need approval from the FDA.
ReplyDeleteWhen we talked about this in class and now reading your summary I wonder when this gets more popular, especially with the aging culture, will people finally become more aware to how much hospitals charge their patients. I agree that government intervention may be necessary to keep their costs down and reasonable. This will help keep elderly people from going bankrupt in the future and helps the current health care situation.
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