CURATED BY Sarah Kliff
2014-04-17 08:35:21 -0400
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Nexium is a bright, purple pill that treats heartburn. It's the second best-selling drug in the United States right now. Americans spent $6.2 billion buying millions of Nexium prescriptions in 2013 alone.
But we probably didn't have to: while Americans pay an average of $215 for a Nexium prescription, the Dutch get the exact same purple pill for $23. In England, Nexium costs $42 and in Spain the price is $58.
If the United States paid what the Netherlands paid for Nexium, we would have spent $663 million on the drug in 2013 rather than $6.2 billion.
There's nothing different about the Nexium that we buy in the United States and the pill that the Dutch buy – except that, in the United States, we're terrible at negotiating a good deal on pretty much any medical service.
"It's exactly the same product but, in terms of the American patient, you're just paying double or more the price for no more health gain," says Tom Sackville, chief executive of the International Federation of Health Plans.
His group published Thursday its annual looking at international variation in health care prices. For all but one item they studied, from Nexium to MRI scans to bypass surgery, the United States is always the most expensive. The one exception is cataract surgery, where the United States pulled off the somewhat impressive feat of being the second-most expensive country after Australia.
The IFHP report undercuts a common misconception about American health care: that it's more expensive because we use more of it. Americans actually tend to use slightly less health care than people living elsewhere. We go to the doctor less, for example, and have fewer hospitals per capita than most European countries.
Americans spend more for health care largely because of the prices.
Most other countries have some central body that negotiates prices with hospitals and drug manufacturers. Sackville, who used to work for Britain's health care system, recalls that it would have a unit of 14 people whose whole job was getting drug manufacturers to give the country a better deal on prescription medications.
That unit of 14 is essentially buying in bulk for a country of 63 million people – and can successfully ask for steep discounts in return.
The United States doesn't have that type of agency. Every insurance plan negotiates individually with hospitals, doctors and pharmaceutical company to set their own prices. Insurers in the United States don't, as these charts show, get a bulk discount. Instead, our fragmented system means that Americans pay more for every type of health care that IFHP measured.
"You could say that American health care providers and pharmaceuticals are essentially taking advantage of the American public because they have such a fragmented system," Sackville. "The system is so divided, its easy to conquer."
How much are we getting taken advantage of? Here are a few charts that show the big disparities between what we pay for health care in the United States and what people pay elsewhere for the exact same drugs and services.
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