Doctors on High Care Costs: We Didn't Do It

So, why are U.S. health care costs so much higher than health care costs in Europe or in the rich countries in Asia?

Docors are trying to refute allegations that they might be the culprits.

Doctors, hospitals and others tend to blame the health insurance companies, but America’s Health Insurance Plans, Washington, points out that care is two or three times more expensive in the United States than in other rich countries, and that, for commercially insured people, health insurance administrative expenses account for less than 15% of the total. And some countries with much lower costs, such as the Netherlands and Switzerlands, also have large health insurance industries.

Some point to the cost of malpractice insurance, lawsuit judgments and defensive medicine, but the Congressional Budget Office has suggested that malpractice-related costs account for less than 2% of health spending, and that limiting malpractice awards and discouraging defensive medicine would cut costs by just 0.5%.

Miriam Laugesen and Sherry Glied, two Columbia University researchers, looked at costs in a paper published in September in Health Affairs, a health care finance and delivery journal, and concluded that high U.S. costs are due largely to high U.S. spending on physician services.

The researchers compared physicians’ fees paid by public and private payers for primary care office visits and for hip replacements in Australia, Canada, France, Germany, the United Kingdom and the United States.

The researchers also compared physicians’ incomes net of practice expenses, differences in financing the cost of medical education, and the relative contribution of payments per physician and of physician supply in the countries’ national spending on physician services.

Private payers paid 70% more for primary care office visits in the United States than in other countries and 120% for the orthopedic physician office visits, the researchers reported.