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'Paying Till It Hurts': Why American Health Care Is So Pricey

"We need <em>a</em> system instead of 20, 40 components, each one having its own financial model, and each one making a profit," says <em>New York Times</em> correspondent Elisabeth Rosenthal.
"We need a system instead of 20, 40 components, each one having its own financial model, and each one making a profit," says New York Times correspondent Elisabeth Rosenthal.

It costs $13,660 for an American to have a hip replacement in Belgium; in the U.S., it's closer to $100,000.

Americans pay more for health care than people in many other developed countries, and Elisabeth Rosenthal is trying to find out why. The New York Times correspondent is spending a year investigating the high cost of health care. The first article in her series, "Paying Till It Hurts," examined what the high cost of colonoscopies reveals about our health care system; the second explained why the American way of birth is the costliest in the world; and the third, published this week in The Times, told the story of one man who found it cheaper to fly to Belgium and have his hip replaced there, than to have the surgery performed in the U.S.

Rosenthal has also been investigating why costs for the same procedure can vary so much within the U.S. — by thousands of dollars, in some cases — depending on where it's being performed. Before becoming a journalist, Rosenthal trained as a doctor and worked in the emergency room of New York Hospital, now part of New York-Presbyterian Hospital.

She joins Fresh Air's Terry Gross to talk about why American medical bills are so high, and what needs to change.

Rosenthal has worked at <em>The New York Times </em>as an international environmental correspondent, a reporter in the Beijing bureau, and a metro reporter covering health and hospitals<em>.</em>
/ Courtesy of The New York Times
Courtesy of The New York Times
Rosenthal has worked at The New York Times as an international environmental correspondent, a reporter in the Beijing bureau, and a metro reporter covering health and hospitals.

Interview Highlights

On the goal of her health care series

"[The purpose is] to make Americans aware of the costs we pay for our health care. Because so many of us have insurance and we don't see the bills, we tend to think of health care as free. 'Why not get that colonoscopy? It doesn't cost anything. What's the difference if my hip replacement costs $100,000? I'm not paying.' But, in fact, we're all paying. And as we know, health care is a huge cause of individual bankruptcies now. Copays and deductibles are going up, and the nation — because it pays for a lot of medical care and subsidizes a lot of medical care — just can't afford the way we're doing this anymore."

On the man who went to Belgium to get a hip replacement

"In Belgium, he paid $13,660 for everything. That included his new hip implant, the surgeon's fees, the hospital fees, a week in rehab and a round-trip plane ticket from the U.S., soup to nuts.

"Now, if he had done that surgery in the U.S, it would've been billed at somewhere between $100,000 and $130,000 at a private hospital. ... So there's a huge difference. In fact, this gentleman, Mr. Shopenn, was a great consumer, and he tried to have it done in the U.S., and he priced out joint implants and found that the wholesale joint implant cost ... was $13,000. So in the U.S., for that $13,000 he could get a joint — a piece of metal and plastic and ceramic — whereas in Europe he could get everything."

On joint-makers keeping prices high

"You would think that if five different companies were making candy bars, that would drive the price of candy bars lower. But if five different companies are making joints and trying to sell them at $10,000 a piece, it's really in no one's interest to say, 'Hey, guess what guys? I'm going to sell mine for $1,000 because that's what it really costs me to make it.' Because then everyone loses money; the whole industry kind of implodes."

On the challenge of standardizing medical equipment

"It's hard to get the companies to, say, standardize the equipment ... so you can use a generic system to implant any brand of joint. It's not in their interest to do that. It's like saying to Apple and Microsoft, 'We want all of your programs to be completely interchangeable.' At some level, at a business level, you want your brand distinct, and you want to keep people in the universe of your brand. In many ways, it's a business decision as much as a medical decision."

On how billing practices in the U.S. compare to those in Europe

"Routinely, for most procedures in other countries, patients stay in the hospital longer; their hospital bills are much less. They tend to see things as a package. I think one of the most striking things when you look at the Belgian hospital bill, as opposed to the U.S. one, is on the U.S. hospital bill for a joint replacement, you see things like operating room fees, recovery room fees. And those [were on] one of the bills I looked at: operating room fees, $13,000; recovery room fees, $6,000; facility fees, x-thousand dollars.

"If you look at a European bill, those things don't exist. And you know, in fact, it was kind of funny when I started on this series — although sad in another way — when I would call some of the European hospitals and say, 'Well, what's your facility fee on that? What's your operating room fee?' and there was this puzzled pause at the other end of the line where they said, 'What do you mean an operating room fee? You can't do the surgery without an operating room. That's a part of our day rate for the hospital. It's all included.' "

On pregnancy costs in the U.S. versus Europe

"Because we pay one by one by one, we have this kind of more-is-better attitude, or 'Why not check and see if the baby is in good position? Why not check and see if the baby is growing?' Whereas in most other countries, the care of a pregnant woman is kind of dictated purely by medicine, what needs to be done. So it's not that in these European countries they aren't getting their prenatal testing and they're not getting their prenatal scans — they are, they're just not getting as many as we do. Because we kind of tend to use a lot of them for like-to-know rather than need-to-know, and again, that gets very, very expensive."

On what needs to change

"Every part of the system needs to rethink the way it's working. Or maybe what I'm really saying is we need a system instead of 20, 40 components, each one having its own financial model, and each one making a profit."

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