So let's suppose we have single-payer or a public option, or even the "high-risk" pool we are getting. The costs are still out of control, and we ought to look at why.
Five years ago I tore the skin on my leg, jumping on a city bus a bit fast and tripping on the edge of a step. Was just bad enough that I wasn't sure if it needed more than a 4x4 and tape. Went to ER to get doc to look at it.
Was cleaned, 4x4 applied, tape. Cost: 2,320.00
A few days ago I fell hard on some uneven ground, and tore the skin on my leg. Definitely needed to be stitched. Went to ER.
Wound cleaned, doc and nurse spend 30 minutes stitching and dressing. Cost: 3,570.00
But one little thing: the first was in dollars, the second in Kenya shilling. The exchange rate is seventy-five to one.
The first was at Boston Medical Center. First rate city hospital.
A few days ago, I was at The Nairobi Hospital. Also first rate, the best hospital in East Africa. (along with the hospitals established by the Aga Khan :-). Right on a par with Boston Medical, except that Boston Medical can draw on other local resources that are top in the world.
So I paid, in dollars, 3570/75. 47 dollars and 60 cents.
Obvious questions: but isn't Kenya a lot cheaper? Yes some things are, they run from about 20% to 110% or so of US prices. (A few things are outliers, produce is very cheap in the districts; while a can of Spam set me back 599 Ksh. Nine dollars!)
However, the equipment and supplies used are just the same as you'd find in the US or Europe, and cost just as much. Some labour is much cheaper; I'll bet the people washing the floors don't make much over $130. Per month. The docs aren't paid the same salaries, as ordinary living expenses are probably 1/4 to 1/2 total as in the US.
So we might expect a ratio of perhaps 5:1? At most? The Nairobi Hospital is not a charity, it is for-profit (small profit, enough to continue as a going concern). Contrast Kenyatta National, which is subsidized by the MoH; but its charges are a lot less. (And the quality not as good, but mostly acceptable.)
There are several things going on I think. The obvious one is that the insurance companies in the US only pay about half what is billed. So the doctors and hospitals, not being stupid, simply double their prices. (BCBS paid some of that bill in Boston; I paid in full in Nairobi with the money in my pocket. ;-)
The pharmaceutical prices are basically organized theft. They are sold at prices sometimes 100x manufacturing cost. (And don't give me any s--t about "research", they spend far more on advertising.)
The overhead of collecting from insurance adds in.
But even with all that, something is basically very wrong with the US charges. How can booking me in at ER reception, 3 minutes of time with the triage nurse, (several hours of waiting ... zero wait in Nairobi :-) 5 minutes of time with an intern, a 4x4 and tape, and a handful of 4x4s and a roll of tape to take with me; how does that cost over two thousand dollars?
(Went back yesterday to get the dressing changed, they cleaned it carefully taking about 30 minutes and re-bandaged. Cost me $11.)
Where is the money going? Do all hospital executives have 150-foot yachts?