Health Affairs March 13, 2020
It is well established that the United States spends more per capita on health care than any other developed country. This difference largely reflects higher prices in the US health care system. For example, while the United Kingdom’s public program paid $18,451 for a knee replacement in 2014, commercial insurers in the US paid on average 53 percent more, or $28,184. This raises the question: Why do we pay so much? The reasons are undoubtedly complex and involve recognizing that inputs such as skilled labor cost more in the US. Yet, our institutions surely play a role. The paradigm of thinking that prices are “reimbursements” contributes to the problem, particularly in the public sector.
When advocating for higher payment,...
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