Why American Health Care Is So Expensive

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THE TREATMENT NOVEMBER 2, 2009

Why American Health Care Is So Expensive

Ezra Klein, channeling Kaiser Permanente CEO George Halvorson:

There is a simple explanation for why American health care costs so much more than health care in any other country: because we pay so much more for each unit of care. As Halvorson explained, and academics and consultancies have repeatedly confirmed, if you leave everything else the same -- the volume of procedures, the days we spend in the hospital, the number of surgeries we need -- but plug in the prices Canadians pay, our health-care spending falls by about 50 percent.

Halvorson's charts, two of which appear below, are pretty compelling.

Of course, some critics would argue that the extra money buys us innovation. But, as I've written before, that argument doesn't really hold up.

Update: Austin Frakt presents more evidence and ponders the significance: "What do you call a transaction in which you pay more than others for the same product? I call it a rip-off."

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posted in: the treatment, health care, business, education, health, labor, politics, social issues, technology, kaiser permanente, person career, ceo, ezra klein, george halvorson

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