EDITORIAL: Soaring health care costs push Americans overseas

The Fresno BeeAugust 8, 2013 

No matter where they stand on the Affordable Care Act, members of Congress should be alarmed at the costs that U.S. patients are charged for common medical procedures that are far cheaper in other countries.

They should be alarmed, but they should also be held to account for their refusal to intervene. The costs that hospitals, doctors and device makers are imposing on consumers, employers and their insurance companies have become a drag on the U.S. economy. Some $2.7 trillion are spent each year on health care in the United States.

An illustration of the problem was provided Sunday by The New York Times in an article carried by The Bee. The report examined prices for hip replacement surgeries. It focused on one man who went to Belgium to have hip replacement surgery at a total cost of $13,660. He did so after learning that the same surgery, with the same type of implant, would cost him roughly $78,000 in the United States.

Why do we pay so much more than European patients for these kinds of surgeries? Part of it is exorbitant U.S. hospital costs. Part of it is the fees paid to surgeons. But a big part is the prices commanded by makers of medical devices. According to Orthopedic Network News, an industry newsletter, the list price of a total hip implant rose nearly 300% between 1998 and 2011.

According to the Times, five companies make nearly all the hip and knee implants used in the United States. Patents, trade policies and a complicated FDA approval process have helped keep out generic and foreign-made implants. That allows manufacturers to charge hospitals up to $5,000 for implants, even though they cost just $350 to make.

In addition, all these companies have strong financial ties to surgeons, and they require doctor groups and hospitals to sign non-disclosure agreements about prices, which means institutions don't know what others are paying. In 2007, joint makers paid $311 million to settle accusations they were paying kickbacks to surgeons.

Regulators and Congress have failed to break up the hip implant cartel and adjust trade policies to increase competition.

Americans can't afford ever-escalating prices for basic procedures ranging from colonoscopies to joint replacements. That is something that Republicans and Democrats should be able to agree on, regardless of their positions on "Obamacare."


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