Americans are feeling the pinch of rising health care costs more than any other nation in the world.
A huge reason why is simply that America lets providers set prices.
The Washington Post’s Ezra Klein draws this conclusion from talking to Johns Hopkins’ Gerard Anderson:
“Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,” Anderson says. They do this in one of two ways. In countries such as Canada and Britain, prices are set by the government. In others, such as Germany and Japan, they’re set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail.
In America, Medicare and Medicaid negotiate prices on behalf of their tens of millions of members and, not coincidentally, purchase care at a substantial markdown from the commercial average. But outside that, it’s a free-for-all. Providers largely charge what they can get away with, often offering different prices to different insurers, and an even higher price to the uninsured.”
As we’ve reported, the average U.S. family of four dropped more than $8,000 on basic health care services in 2011, while record numbers of Americans have been filing for bankruptcy due to outstanding medical bills they can’t afford to pay.
Check out Klein’s chart below to see how America’s medical costs stack up against other countries like France and India:
Photo: The Washington Post
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.