Charts showing how much US residents pay for health care compared to people in other countries

Nixar

@Anonymous: Â«A number of posters have commented that the comparisons are skewed because they don’t factor in taxes paid in Europe, etc. that goes toward health care,Â»

No, I believe the prices quoted are before insurance reimbursements. Not all systems are like the UK’s or Canada’s, where the state pays doctors directly. In fact, most are not.

Here when I go to the doc (GP) I pay â‚¬22, he swipes my insurance smart card; then a few days later â‚¬15 is wired to my account automagically (no paperwork), and a few days later still, my complementary insurance pays me â‚¬6 back.

He hands me a prescription, which I give to the pharmacist, who then swipes my card and gives me the meds. He gets the amount wired automatically, from both the public insurance and the complementary insurance. Again, no paperwork. But they’re private businesses, it’s just that transactions are handled electronically.

Daemon

For the folks whining about not including the taxes:

All other points asside, I’d rather my tax money be spent on making people healthy than making them dead in a foreign country or harassing random folks in airports.

Nixar

Â«Making prescription drugs that actually work costs money. R&D costs money. Testing for efficacy and safety in humans costs even more money. Countries with nationalized medical care bully drug makers into lowering their drug prices, drug makers have little recourse but to agree, if the prices are above the incremental cost of production it’s not too bad. But this leaves the US market as the only source of revenue for paying off the development cost of drugs.Â»

Oh geez, not that crap again.

Here’s the thing. Guess what’s unique to the US wrt healthcare?

Lack of universal coverage. True, but what else?

Mostly unregulated predatory private insurers. True, but what else?

Huge malpractice settlements? True, but .. what else?

Let me tell you what’s unique to the US: nowhere else in the world will you see the constant barrage of prescription med advertising you get there. In most countries, those severely constrained, if not forbidden entirely. It’s even completely alien to us, to the point that we are extremely surprised when we see US television.

Here’s how you get an instant 33% discount on drug prices — forbid advertising to the general public for prescription drugs. There. Boom. Instant saving.

Patients shouldn’t ask their docs for drugs. Doctors should decide what’s best for them. It’s their god damn job. Not only are ads expensive, they also encourage overconsumption.

apoxia

I agree with Nixar. When I see American television I find the drug advertising incredibly strange. It just doesn’t happen in New Zealand.

We have a drug buying agency here called Pharmac which is separate from the government and is responsible for buying all publicly funded medications in NZ (pubicly funded medication costs $4 a prescription here, the rest is subsidised by the govt). Pharmac buy generic drugs, where ever possible, and they buy in bulk (if you can call a county of 4 million people a bulk order). Drugs are therefore cheaper then buying name brands. Maybe this has something to do with the lower medication costs here.

Anonymous

I wish all my naysaying relatives in the US could see this-it should be on the front page of every newspaper, and the lead story of every newscast in the US.
I would be dead, full stop, if it wasn’t for the Canadian medical system-and I never take it for granted, but it does break my heart that everyone in North America doesn’t have what we have, that people have to take their life savings, sell their homes, and become poverty-stricken in the name of Capitalist medicine-it’s totally immoral, and I know someday the folks in the States will look back on this time and wonder how anyone survived.

Anonymous

“Effectively, US consumers are subsidizing all other markets, and, if they didn’t, the other markets would not have access to those drugs either.”

Thank you US. All the rest of the World thanks you for your generosity with all of us.

Anonymous

we are getting screwed

ElizaB

The claim that development of new drugs is funded by the high prices paid US drug consumers is a complete fallacy. Pharmaceutical cos. spend over twice as much on marketing and administration as they do on research. And the top 10 drug companies make more in profits than the rest of the Fortune 500 combined.

See the book â€œThe Truth About Drug Companiesâ€¦â€ by Marcia Angell, the former editor-in-chief of the New England Journal of Medicine.

Cicada

Average GP salary in the UK: $104,151
Average GP salary in the US: ~160,000

And let’s not start on the specialists…

Remember, insurance companies manage about 6% profit margin. That’s not exactly draining the blood of their customers for massive profits.

Anonymous

> Recap: U.S. market requires billions spent on marketing, leading to higher cost, requiring high drug prices.

Citation?

Anonymous

Heh – physician fees are one thing, but what we actually get paid is often much, much less than what we ask for. Typically most insurance companies only pay medicare rates, so those “fees” listed are not typical at all for what the doctor actually receives.

Anonymous

how much will it pay someone working with the health care system in a hour.?

Anonymous

Well this hasn’t settled jack. Everybody continues to believe whatever they want, and the O.P. has not chosen to step in and correct whichever side happens to be wrong. The Republicans say “these are the OUT-OF-POCKET costs, they don’t include the ADDITIONAL TAXES,” and the Democrats say “these ARE the total tax costs, the out-of-pocket costs are ZERO,” and one or the other side is batshit crazy, and nobody has learned anything.

Anonymous

I thought this was an educated, cynical crowd. Let’s request the raw data so we can make a better analysis rather than rely on someone else’s interpretation of data that isn’t necessarily scrutinized heavily.

Also, let’s can it with the “For-Profit companies screwing us” line. There are plenty of not for profit and non-profit healthcare co-ops and insurance providers. My former employer, the 8th largest one, is non-profit. And the costs were still very high. They wished the could market in surrounding states, but the cost of doing business across state lines was ridiculous due to Federal and State legislation. That further compounds the differences between a single-entity system and our fractured system because it isn’t Private vs Public, it’s Fractured with Regulation vs The Regulator as The Only Buyer.

Grant

@ stevenstevo: There is not a single person in the entire nation of Canada paying 55 – 60% income tax. I am constantly astounded at how many times I hear that absurdity proclaimed by americans as if it’s a well known fact or something.

The absolute HIGHEST federal income tax bracket in Canada is 29% for crying out loud. And there isn’t a province in the nation with a 20% plus provincial income tax bracket. Not anywhere.

You are here posting this on the internet. I thus assume you have access to Google or some other search engine. Did it never occur to you, before posting, to possibly try going there and typing in soimething like “Canadian income tax rates”? 5 minutes of your time to avoid making a fool of yourself seems like a reasonable investment.

And that aside, how the hell do you go from the information presented here, which is that health care services COST LESS in other nations, and leap from that to the conclusion that therefore their taxes must be completely out of control! Yes, that makes perfect sense.

In reality, average Canadian marginal tax rates are in fact a measly couple percent higher than in the US, but not because of those *lower* health care costs, obviously. The taxes are higher for other social services… oh, and that federal budget SURPLUS Canada was running for 12 straight years before the recent global recession while they paid down their national debt… unlike a certain nation to the south of them with half the electorate and a certain political party that was screaming and crying and stamping their feet for ever-lower taxes even while their national debt spiraled out of control.

Anonymous

I have read a good number of the comments, not all, there are too many.
Those that I did read seem to miss the vital point.
In countries where there is a national health service NO ONE IS LEFT BEHIND.
The U.S. mindset seems to be I’m okay to hell with you.
Yes, taxes pay for national health care and I believe it is less painful than selling your home to pay.

Meggha

Um, people who have to stay at home because they’re handicapped and can’t drive have to pay physician delivery fees! And those people really need their doctors and drugs! Wow, how daft can you be??

Anonymous

Actually, by far the biggest reason drugs cost so much more in the U.S. than other countries is because of advertising costs, not because of research and development costs. All those drug commercials you see on TV, magazines and billboards have driven up the cost of drugs in the U.S. to inflated levels.

Drug advertising is mostly banned in other nations because of this and because they believe it’s wrong for commercials to influence the decisions doctors and patients make.

The pharmaceutical companies actually now spend more on advertising than the do on research and development.

http://www.sciencedaily.com/releases/2008/01/080105140107.htm

Zuato

One of the biggest issues with the health care system in the US is that it is full of greed. The Doctors (justifiably) want to make as much money as possible. The insurance companies want to make as much money as possible while paying out as little as possible, thus affecting how much care you can get from said doctors. It’s all about profit for both, but in the end it ends up costing more. Doctors raise their rates – they know they can get it from the insurers. Insurance companies raise their premiums for their insured. Then they raise the deductible. Then they increase the co-pay for an office visit. Then they reduce what meds and how much of them they cover. Then they have an approval process to get certain things covered. All in the name of profit.

Now take a majority of doctor’s offices I’ve been in over my 37 years of existence – all but one doctor so far has behaved like an assembly line – they get as many people in the door and back out as quickly as possible to collect as much insurance money and co-pays as possible. They act put out if they have to spend more than 5 minutes discussing anything with their patients. Does anyone stop to think it is because the insurance companies are colluding with them and that something should be done? I’m all for a government based system here in the US if it dismantles this buddy system between health care providers and insurers. I believe the amount I pay in increased taxes would be much less than what I am paying per month for my premiums, co-pays, deductibles, and meds without much doubt, not to mention what my employer pays per employee to the insurance company.

Robert

Wasn’t there also something where countries (non-U.S.) would refuse citizenship to immigrants with preexisting conditions because they would always be a burden on the healthcare system? I’d love to move and get a job in another English-speaking country, but I’ve got diabeetus.

lilacsigil

Yes, this is correct. If you or a family member have a chronic medical condition, you lose “points” in the Australian immigration system. You can gain points by, for example, having in-demand skills, not being too old, being willing to move to a rural area, etc. So it’s not an automatic exclusion, but it doesn’t help. A doctor specifically recruited to my local area was almost sent back to England because his son is disabled – local outcry saved him.
apoxia

Yes Robert that is true also in New Zealand. A nurse from England was recently refused entry due to being morbidly obese, despite New Zealand always having a shortage of nurses. Like you said, the main reason is to stop people with illnesses using health resources. There must be some way around this, such as people being able to fully fund their own health resources, and other things that lilacsigil said.

TJ S

Come on, who’s actually paying physician delivery fees, when you can just do carryout for free instead?

RogueModron

For those wondering how the numbers were obtained and organized, here’s the link to the powerpoint:
http://voices.washingtonpost.com/ezra-klein/IFHP%20Comparative%20Price%20Report%20with%20AHA%20data%20addition.pdf

On page 29 it has the contact information of the CE of the group, so you can always email him with questions.

midknyte

Are these out of pocket expenses?
Are taxes funding the goverment provided options factored for direct comparison?

Anonymous

We (Canadians) don’t have out of pocket for physician visits. The entire fee is paid by the government/taxpayer.
redpandaredpanda

The charts have to be talking about taxes expenses.

At least in Spain, pocket expense when you attend to a doctor is 0, always.

Anonymous

“Our Lipitor must be four to ten times a good as the Lipitor that Canadians take.”

Lipitor was invented in the US and protected under US patents until 2011. Canada, France, Germany, etc. have low-cost Lipitor because the cost is much higher in the US. Pfizer recoups the billions they’ve spent on research, development, marketing, etc. in the US market. Since the other countries have single-payer systems, any price their governments are willing to pay above the cost of production represents more revenue to Pfizer, so they are willing to sell their drugs for much less abroad than domestically.

If it wasn’t for this dynamic, very few life-saving drugs currently on the market would be sold at all. Effectively, US consumers are subsidizing all other markets, and, if they didn’t, the other markets would not have access to those drugs either.

Hybridan

You are assuming a profit motivated drug development, and a position in which it is better to profit from the health care of others then to actually care for them.
Antinous / Moderator

US consumers are subsidizing all other markets, and, if they didn’t, the other markets would not have access to those drugs either.

Can you provide some citations for that?

Enoch_Root

These charts are absolutely useless unless they factor in how much people subsidize these fees through taxes. If I pay an 8% VAT on top of everything I buy at the store that pays for my “cheap” health care then it might not be all that different in total cost.

It is also distorting to include the range only for the US and only the average for the other countries.

This doesn’t mean our health care isn’t more expensive but these graphs are misleading.

Anonymous

which is why it says “for illustrative purposes only” on the top right of each graph.
beneditor

“These charts are absolutely useless unless they factor in how much people subsidize these fees through taxes”.

Utter nonsense. These costs are easily comparable between countries. Even countries with a subsidised healthcare system have billing and charges for items like these – as well as private healthcare available via insurance. These billing costs have nothing to do with the taxes raised to pay for them – doctors have wages and consultancy fees and drugs companies have prices.

I’d agree with your comment about the averages, however – although as the ‘low end’ cost was higher than every other country in every case, I’m not sure how that works in the US’s favour….
- Anonymous
  
  I’m sorry, but I agree with Enoch_Root. I have no idea what these numbers mean. In Canada, for example, there is no co-pay or any additional fee for a doctor’s appointment, a hospital stay, or a baby delivery. So I assume the numbers for Canada must include taxes and insurance premiums. Or maybe they’re just made up??
- SKR
  
  Utter nonsense. These costs are easily comparable between countries. Even countries with a subsidised healthcare system have billing and charges for items like these – as well as private healthcare available via insurance. These billing costs have nothing to do with the taxes raised to pay for them – doctors have wages and consultancy fees and drugs companies have prices.
  
  I think there is a problem with these comparisons. The issues crop up in the footnotes with statements such as
  “There are no government fees associated with MRIs because the equipment is typically purchased by local health authorities and is included with fees for facility level use”
  So obviously there is some cost shifting there. Also it begs the question whether the costs of the equipment are factored into the fees that are being incurred. So the fees for an MRI in the US are going to include the purchase cost of the MRI, but that purchase cost may show up in some other category in another country so as to skew the relationship between the two numbers. Then I have to ask whether the cost of the actual hospital building or doctor’s office among other capital expenditures are included in the numbers. This seems doubtful. So just because a doctor charges a fee in both countries doesn’t mean that those fees measure the same thing. You can compare two dogs and deduce that one is better than the other, but the comparison isn’t fair if one is a chihuahua and the other is a great dane. Sure they are both dogs but they aren’t the same.
Anonymous

These charts do take that into account. The payment by the patient for service in most cases is 0 in Canada. I know this because I’ve lived in Canada for over 20 years.
johnnycache

We pay PLENTY of taxes in the US. They just aren’t well spent, or organized.
Kieran O’Neill

As near as I can make out, in most cases this is what the government-run medical insurance service pays to the health care provider (or what it costs them internally if they’re the same thing), not what the consumer pays.

Most of those services have no charge to the consumer.

So no, tax doesn’t come into this. This *is* what the tax pays.
chip

“It is also distorting to include the range only for the US and only the average for the other countries.”

Actually, since the other countries have standardized, socialized health care, there is no “range”. The amount that doctors and hospitals are allowed to charge is set by the government, so everybody pays the same price.

In the US, not only do fees vary from hospital to hospital, but also from patient to patient. Most insurance companies get automatic discounts at many hospitals, so the total bill for an uninsured patient is 20-30% higher than an insured patient’s bill, even for the exact same procedure.

Anonymous

Since it only includes the UK under “drug prices” we have to assume that it only refers to out of pocket expenses.

xaxa

I think these figures are what private care costs in each country. For instance, it says Lipitor costs $40 in the UK — but it doesn’t, it would cost Â£7.20 (with big discounts if you need it regularly, or Â£0 if you’re given it in a hospital rather than after a visit to your GP [family doctor]).

Gendun

I can’t help but wonder why all the charts are labeled “For illustrative purposes only”.

phenomenon

Its annoying to see so much misunderstanding when it could have been easily prevented by a single sentence in the OP. (Not that it would stop some :P)

These charts don’t indicate what the patient is billed, these charts indicate cost. Subsidised or not, paid with taxes or not, these amounts are what you get when you add it all together.

Anonymous

There’s only a range for the US because the US is the only country listed without universal health care. In the US, depending on which hospital you go to, you could be paying in the low range, or the high range. In any of the other countries listed, you don’t pay at all, but instead it comes out of your taxes.

This is one thing Americans don’t seem to get. They would rather pay some insurance company more a bunch of money to get their health care, than pay the government taxes to get their health care, even if it means they end up paying said insurance company more money.

And don’t even pretend that the US has better care than those countries listed. It’s been shown time and time again that having privatized health care doesn’t guarantee you any better care than you would get with a good public system.

Camp Freddie

In socialised medicine, doctor asks you!

/smirnoff

The US should seriously consider banning adverts to the general public for prescription medicine, like here in the UK.

All I have to put up with is bullshit from Nurofen about how they precisely target the source of pain with their extortionate branded ibuprofen. Nurofen costs 10x more than identical drugs because you pay for their TV ads. American prescription medicine is the same.

Cosmonaut Zero

The range makes it look better for the US, IMO. I’m looking at these comparisons and I’m just assuming only care about looking at the low end. I make my arguments from the most conservative available estimates to ensure the data are above reproach. If they used the average I wouldn’t be thinking “at least twice as much” I’d be thinking “about four times as much.”

I am curious whether this is adjusted for taxes though. I followed the links through to the original site, but couldn’t quite tell. Maybe it’s best to use the Medicare figures for a more direct comparison, considering that it is also tax-subsidized?

Machineintheghost

@ Enoch_Root

That’s a good point. High consumer prices are a good thing if the price accurately reflects the real societal cost of the thing.

With that said, I bet U.S. costs for health care are still out of whack, one way or the other. But the other prices may be still more out of whack. By the same token, the nominal money price of anything means less if the distribution is mostly a function of political rationing.

In imperial Rome, bread and circuses were nominally cheap. In the USSR, bread was nominally cheap (I don’t know about circuses, but I bet they were cheap and better than Ringling Brothers.) That doesn’t mean that people were better off for having cheap bread and circuses.

Anonymous

Sick and injured people are not “consumers” and health care is not a product you can choose to consume or not to consume, or replace with something else that’s cheaper, nor does being sick or injured motivate or enable anybody to work harder to make more money to pay the associated bills. To the extent you need health care, you have been removed from the marketplace, and the more health care you need the more irrelevant market forces are to you.

Anonymous

People are absolutely correct to note that these charts are misleading if they don’t inform observers about what unshown amounts have been paid from taxation.

And people hoping to illustrate unneccesary costs in the U.S shouldn’t be fearful of providing that information because the difference isn’t as much as will be claimed by supporters of private insurance.

But by not providing it they leave an unknown that obsfucates discussion.

bazzargh

For those talking about government subsidies its worth pointing out that all of these figures are for *private healthcare plans* not for government-provided services like the NHS; its nothing to do with taxes. Which isn’t to say this is an apples to apples comparison.

Here in the UK, private healthcare often means the same doctors and hospitals are used as in the NHS, but there’s a facility fee paid. However people don’t always use their private plans, so e.g. if you were in a serious accident you’d most likely get treated on the NHS first, then switch to private for physio etc. Which is bound to affect the average cost.

Anonymous

I would have to agree with Enoch, #3. Also, many Americans buy health insurance. Depending on the plan much of those costs can be greatly reduced.

cjp

I’m trying to remember the last time I wrote a cheque for health care. (I’m Canadian) I have never paid for a doctor’s visit, but I was charged $50 for an emergency ambulance transport, once. Even my drugs are covered under benefits, as are my mother’s because she is a senior. Just reinforces the quickly growing idea that the US is a third world country.

thequickbrownfox

Got my Zoloft yesterday, $5.30 AU.

Anonymous

A number of posters have commented that the comparisons are skewed because they don’t factor in taxes paid in Europe, etc. that goes toward health care, but what about the costs we Americans pay for insurance — both our deductions and our employer-paid insurance premiums? Any discussion of total cost will need to factor in both the ongoing, regular fees as well as the fees-for-service components to determining overall costs.

Anonymous

I’m curious to know whether these costs are before or after insurance pays their share, or if this is based on people who do not have insurance.

Regardless, I can totally believe the drug prices chart. Last week, I went to pick up my prescription at the local pharmacy only to discover that my insurance now refuses to pay for my meds unless I go through their mail order service. Surprise! What usually would have cost me my $10 co-pay, ended up costing me over $500. And, yes, I cried.

Bevatron Repairman

The drug price is an interesting number, the rest not so much. Medical accounting is the blackest of arts and trying to tease out all the cross-subsidies present in this stuff is impossible: part of the reason hospital bed costs are high in the US are that hospitals don’t get anything from indigent patients or ones otherwise who end up bankrupt and need to make it up from patients who pay. So the number in France is actually probably closer to a per-patient number, but the one in the US is a per-PAYING patient number.

Anonymous

Where’s the chart that compares how much the doctor in each Country pays for malpractice insurance?

stevenstevo

Do you people honestly believe that the above fees and costs for the non-US countries are not affected by those countries’ publicly-funded health care systems (taxes)? If they are not based upon such public funidng, then where do you think the prices come from? Supply and demand? That would be some pretty weird universal health care systems. Surely you do not think that the prices of goods and services are determined by their cost.

Universal health care is a very simple concept, and the current situation in the US should offer a crystal clear illustration. Universal health care has a price, and indeed a very steep one. While I wish we could simply decide to have universal health care and find ourselves paying $250 for a heart transplant from a team of well-trained cardiologists and cardiac surgeons at a state of the art hospital, unfortunately that is not how things work.

The cost of the current health care bill (I lose track of what version it is): $1.055 trillion dollars. Quite an astounding number, especially when you consider that the bill is highly watered-down from what Obama promised and as such nowhere near the level of the publicly-funded health care systems of the non-US countries above.

I wonder where all that money is gonna come from? Taxes, taxes, taxes. If you want to live in a country where there is universal health care, then you will have to pay income taxes at levels like 55% or 60%. If you are fine with that, then, by all means, move.

arkizzle / Moderator

“If you want to live in a country where there is universal health care, then you will have to pay income taxes at levels like 55% or 60%.”

You might want to actually find out what the average income tax expenditure is from people living in countries with/without universal healthcare before continuing that thought. I can offer my current experiences:

UK income tax (with full UH)
22% from Â£2,231-Â£34,600
40% over..

Ireland income tax (without full UH)
20% on the first â‚¬36,400
41% over..

Ireland is currently listed in wikipedia as having universal healthcare. Seemingly it was legislated in 2004 and begun in 2005, but hasn’t been effected yet.

We do have a ‘medical card’ for social-welfare recipients, retirees and long-term-ill, but the rest still have to pay for GP visits, operations, drugs etc. We certainly don’t pay as much as the US for any of it, though.
redpandaredpanda

I think you don’t get it. That prices are how much people are TAXED for having a free universal health care.
Gloria

@stevenstevo: 55% or 60%? Egads! Citation, perhaps?

I admit I don’t have citations, but I’ve been paying my Canadian income taxes for a few years now, earning an average bracket, and I can assure you it’s much closer to 25-30%.
- Gloria
  
  I just pulled out my pay stubs, and the income tax deductions are 22% (some of which I might or might not claw some back come tax day).
  
  So … 55-60%? I’d be interested in hearing some names.
- redpandaredpanda
  
  For reference: Spanish average income tax is around 25-30%, too.

panoptacon

I’m confused. I am Canadaian and I have never been charged for Physician Fess or Hospital charges. I only pay MSP monthly.

Graham Anderson

I love the comments: “Ooh, the rest of the world only benefits from groovy new drugs because America subsidizes the costs!”

Anyways, a quick check of Wikipedia shows that World Health Org data has France spending 11.2% of GDP on health care, or US$3,926 per capita. For that, they get “the best healthcare in the world”. For somewhere to look at closer to the US, Canada also has better infant mortality rates, life expectancy and lower cost-per-capita than the US.

The US spends 15.2% of GDP on health care, or US$6,347 per capita.

So that sorts out the up-front-cost versus sekrit government subsidy of evil socialised medicine question.

For what its worth my dear American friends, here in Britain we also have better life expectancy and infant mortality rates for lower costs, but if you’re going to learn from anyone, learn from the French. That would be smart.

http://en.wikipedia.org/wiki/Health_care_system#Cross-country_comparisons

Anonymous

These are misleading charts, they don’t take into account tax collections, nor distribution of those taxes. Such as the fact that the US funds two wars, provides monies to every government in the world etc etc. lets cut some expenses and make room for free health care, but we can’t have everything. I don’t get to run over my means, what makes the government can run over theirs? People shouldnt be afraid of their governments, governments should be afraid of their people.

desiredusername

Am I correct in interpreting this to say that these prices by health providers are targeting the ability of insurance companies to pay those sums while the insurance companies still remain profitable? If that’s true then A) insurance companies are making enough money to compete with a public option and B) this is a system that ruins the uninsured between 2X and 6X times faster than in other countries.

stevenstevo

Oh yeah, couple simple clarifications:

1. Thanks 55 — I spent 10 minutes and pulled up that presentation that made these medical fees graphs. According that, the fees for the non-US countries are indeed subsidized by public funding. Those are the prices that hospitals are allowed to bill patients as mandated by the countries’ governments.

2. Regarding the comment that drug companies spend more on advertising than R&D, that is entirely incorrect. Consider Pfizer’s 2008 annual report: $8 billion spent on R&D and $2.6 billion spent on selling, general and administrative costs, which includes advertising costs.

3. For those who want drug companies barred from advertising, realize that less advertising means less demand. Last time I checked, lower demand = higher prices.

ElizaB

In 2006, Fortune 500 drug corps:

Had $230 billion in sales revenues

Spent $73 billion on marketing and administration
Spent $37 billion on research & development

Retained $49 billion in profits

In that year, 93 new drugs were approved; of those, only 6 were improvements. All the rest were â€œme-tooâ€ drugsâ€”i.e., trivial variations of already-existing drugs, not innovations.

See sources in the short (2:45) video at http://www.youtube.com/watch?v=ouF3ISihHLM
redpandaredpanda

@stevenstevo(#66)

1.- That’s simply not true. In Spain (and, for what I’m reading here, in Canada and UK, at least, too), you don’t get billed a dime for using public healthcare. Believe me, I’ve been going to doctor, both local ones and big hospitals, and I have never pay a single euro. My grandmother was interned in an hospital a couple of years ago and she didn’t pay anything for occuping that bed for weeks. So that’s not true. In Spain you don’t pay a single cent for the health care, it’s paid by everyone by taxes.

3.- That’s not true, either. Again, here, in Spain, you can choose between branded drugs or “white label” ones, exactly the same. Last time I checked, while label ones, exactly the same that branded ones, were FAR cheaper.
peejaybee

Stevenstevo: you’re reading the report wrong — they don’t mention the marketing costs in the annual report as far as I can see. If you look at the 10-K report (excel version, see the “income statement” tab) you’ll see that for calendar year 2008, R&D was indeed 7.9 billion, but “selling, informational and administrative expenses” were 14.5 billion.

The 2.6 billion figure for 2008 covers just the cost of airtime and space in publications.

scolbath

I don’t know about the other graphs, but there is no way — I repeat, NO WAY — that an office visit in Spain costs $15. Let’s assume a 15-minute visit in both cases. That means the US hourly cost runs from $200-$600/hr, with Spain running at $60/hr. But presumably those costs cover all the overhead, right? Electric? Heat? Rent? The paperwork performed by the doctor? His assistant? The person who met you at the door? The *benefits* for the person who met you at the door?

$60/hr is about $110,000/yr-ish. Perhaps if that doctor had a free education and free malpractice insurance.

Let’s be real.

Nixar

@scolbath: Â«$60/hr is about $110,000/yr-ish. Perhaps if that doctor had a free education and free malpractice insurance.

Let’s be real.Â»

Let’s get real, indeed. Medical school is free in many countries (it is here), and humongous malpractice damages are very much a US only thing as well — and an exagerated problem at that (it’s been estimated to contribute to less than 1% of the overall US healthcare cost).
redpandaredpanda

[quote]with Spain running at $60/hr. But presumably those costs cover all the overhead, right? Electric? Heat? Rent? The paperwork performed by the doctor? His assistant? The person who met you at the door? The *benefits* for the person who met you at the door?
$60/hr is about $110,000/yr-ish. Perhaps if that doctor
[/quote]

In fact, doctors in spain have not free education, but education here is far cheap than in the US. The best universities are the public ones, and the yearly cost of attending one vary between 500 and 1000 euros, depending on the carrer you choose and your previous years grades). So a medicine title here could cost you around 5000 euros (around 7000 US$, I think).

And maybe I’m wrong, but I think doctors don’t need insurance here. It’s not a common thing to be dennunced for malpractice, and I think goverment probably pay the cost in that case. You know, they are public servants.

By the way, the “rental cost” of medical facilities is 0, since they are goberment buildings, public owned.

Oh, and I think the monthly salary of a just-out-of-faculty doctor is around 2500 euros. If you take 4 weeks, with 40 working hours each, they get paid 15 â‚¬/hour, around 20 US$, so 15 US$ for each visit are more than enough, in fact.
Antinous / Moderator

That means the US hourly cost runs from $200-$600/hr

Here in the US, I have an HMO (Kaiser), so I normally just pay my $25 copay. I accidentally saw the itemized statement for my last office visit. They charge $414 for a ten minute visit! I was about to go to a deductible plan to cut down on my $425 monthly premium. I’m forced to re-evaluate.

Anonymous

This must be the full cost of these items, not the user-payable portion. I live in Canada, and I don’t pay a cent for a routine doctor visit out of my pocket… totally covered by federal and provincial taxes.

If so, then this is indicating that routine doctor visits, for example, are 2-4x as much in the US as Canada, and suggests that American doctors must drive far nicer automobiles/pay much larger student loans than doctors in Canada.

Anonymous

The cost of prescription drugs around the world is misleading.

Making prescription drugs that actually work costs money. R&D costs money. Testing for efficacy and safety in humans costs even more money. Countries with nationalized medical care bully drug makers into lowering their drug prices, drug makers have little recourse but to agree, if the prices are above the incremental cost of production it’s not too bad. But this leaves the US market as the only source of revenue for paying off the development cost of drugs.

Realize that people in the US who are paying those higher prices for, say, lipitor are subsidizing lower cost lipitor in Spain, Canada, France, etc.

The vast majority of medical innovation in drugs and new treatments comes from the US. If the US decides to nationalize health care and forcibly lower drug prices the result will be a dearth of research on new drugs. Everyone in America will pay the same low prices for drugs as many other countries, but we will have killed the goose that lays the golden eggs, drug development will slow to a halt and we will all be much, much worse off.

MrNose

You’re right, all of those things cost money, but the catch is, R&D makes up only a small portion of a drug company’s U.S. budget. The vast majority of a U.S. company’s budget goes to advertising. Ironically, all the other countries with low cost drugs also have rules which restrict the ability of drug companies to advertising.

Recap: U.S. market requires billions spent on marketing, leading to higher cost, requiring high drug prices.
Other countries restrict marketing opportunities, leading to less cost, leading to the ability to have lower drug prices with less R&D.

There is also the argument that lower cost drugs would allow for widespread international consumption of drugs, leading to a diffusion of income but a net gain in profit.

PaulR

Am I the only one that understands what “physicians’ FEES” means? What “Total Hospital and Physican Costs” means?

OK, here’s the kindergarten explanation:
That upper left chart? It show what the doctor charges for a typical office visit. The American doctor charges double to fives times as much. So unless the average American’s income is double to five times as much as, say, a Canuck’s, it’s costing you more.

In the ‘States, the doctor charges the patient directly or (you poor, poor saps) charges an out-of-control private medical insurance complex who’s only missions in life are to drain as much money out of the public while denying them as much medical care as possible. We know that.

In just about every other developed country in the world, the doctor charges the government medical system. Yes, yes, yes, we know that the doctor is paid by taxes – which the citizens pay, either as sales tax or income tax. But here’s the tricky, subtle part: whether I take five bucks out of your left pocket, your right pocket, your wallet, or out of your paycheck before you get it, you’re still five dollars poorer.

Got that? No?

OK, try this: If you need to have a hip replaced, get it done in Canada. You’ll save AT LEAST $23,000, maybe up to $58,000. You might even get to keep your house or your retirement funds.

If that hip replacement costs more in the USA, you get charged more. Whether that’s paid through taxes, insurance premiums, or your checkbook.

As far as the For Illustrative Purpose Only, I think that like the Not Official Lottery Numbers, Check with the Lottery Agency disclaimers in newspapers.

While we’re dumping on ‘Mercans: y’know, if you’re a Canada who wins the lottery in Canada, the winnings are tax-free. Raw, gaping wound, meet salt.

Brainspore

It’s not like there’s no precedent for this. How much does it cost to have FedEx a pick up a letter from your home and hand-deliver it to someone in Alaska? More than 44 cents, I’d wager.

apoxia

From a New Zealand perspective, I visited the doctor last week and it cost me $25 NZ, so about $17.50 US. We pay taxes for our universal healthcare.

NZ has a graduated tax rate system whereby income is taxed by different amounts as follows:

up to $14,000, 14.2%
$14,001 to $48,000 inclusive, 22.7%
$48,001 to $70,000, 34.7%
$70,001 and over, 39.7%

For example, someone earning $50,000 will have $14,000 taxed at 14.2%, $34,000 taxed as 22.7%, and $2,000 taxed at 34.7% By my rough calculations, $10,400 would be paid in tax on this $50,000 income. Those tax rates include our no-fault accident compensation cover which means the government pays for your healthcare following an accident and people don’t have the right to sue for damages.

If anyone wants to work out whether in NZ we are actually paying more than you in the US with all our extra taxes then you should be able to work that out with the info provided :)

Anonymous

Those damned socialists; they want to take all the money from the corporations by lowering health care costs.

Anonymous

Enoch, I’m a Canadian who’s never paid a cent out of pocket for routine office visits with a physician, so I’d assume that figure of $30 listed as the price for a visit in Canada *does* include taxation. It definitely doesn’t include any money I hand over to my doctor at the time.

IronEdithKidd

Really Anon @52? Because if there’s a difference in what insurance pays and the doctor charges, I eventually get a bill for that difference.

Anonymous

These charts are a bit confusing.

@midknyte: The “out-of-pocket” cost in countries like Canada is 0 for everything (except drugs, which are subsidized).

I’m guessing for all countries, these numbers are what the medical service provider would bill.

Zuhaib

Some of the charts are badly made, they should have went with averages all around. While one can argue the issue with that is in other nations with a single payer system or price control you dont have a average but a set price so in the US you have to look at the high end and low end.

But they still highlight the issue I have with US health care is that real reform is about bringing cost down. Many US Insurance companies go between years of killer profit to almost going bankrupt (look at Aetna) and get pointed at as the problem but dont see the issue is the cost of care and drugs. Right now pretty much all these reforms are *hoping* to bring charges down but for now they (the Government) will be paying higher cost compared world wide. We need reform on cost first, then looking at insurance reform.

But the issue with caps is the fear of hospitals bases care around that. My father who is retried has full coverage from his company and medicare and while in the hospital for a acute kidney failure on the day he hit his medicare limit they released him. Was his kidney 100%? No but the doctor gave us a story that he was on a upward trend and he should go home. We did. He was back in the hospital the next day as his sugar was wild. Was it bad care or a money decision?
I dont know

Garmt

OK, this is interesting.

A gynaecologist that I knew in The Netherlands once told me how much he got paid to do the delivery for a baby (or rather, what his fee was – what he got in the bank was in the end only about 20% of that amount). I don’t recall the exact number but it was in the range of several hundred euro’s (and I do recall thinking “really? that’s all? you stand the horror of being near a woman giving birth for up to 46-or-so-hours and all you get is a few hundred bucks?” (yes, I am an insensitive clod)). Since that was HIS FEE, there is no tax subsidy in that. People having to pay that fee might get reimbursed from a tax-subsidised-healthcare-system, but it seems that the physician fee listed here is quite realistic.

mercator

It’s obviously difficult to make direct comparisons given the nature of the different countries systems, but to clear up some of the confusion about the Canada numbers: I don’t pay anything to see my doctor, and if I need to stay in a hospital I also do not pay (unless I want a private room). My kids were born quite a while ago, but I don’t remember paying anything for the delivery then. I do pay for prescriptions though.

You can go ahead and adjust that for taxes if you feel it will help the US system look better.

JeffF

An interesting fact I came across recently is that there are two segments of health care spending where the US actually isn’t leaps and bounds above all other wealthy countries:

In long term care, dominated by the very elderly in nursing homes, we are at around the 75th percentile. The highest was Sweden or Norway.

In some category called “medical devices” or something, which I think referred to fairly durable take home medical equipment like wheelchairs we were similarly non-extraordinary.

Nixar

@enoch_root: I can tell you that the fee for France is what you pay whether you have insurance or not (a foreign tourist for example), you get reimbursed later (66% through the mandatory public plan, the remainder minus 1â‚¬ by your complementary insurance). To be fair, some doctors are more expensive than that, but most charge this standardized fee.

Charts showing how much US residents pay for health care compared to people in other countries

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