Friday, May 25, 2007

Expensive Medical Care: A Lesson From India

Triya gives a good contrast to how medicine is handled in India (emphasis mine):

I finally got my poor back checked by our family doctor yesterday. He suggested an MRI (Magnetic Resonance Imaging) as the first step of the diagnosis. Here is the Wiki entry on MRI. The process cost Rs.4000 (approximately $100), and that's not the end of the story. My doctor called the diagnostics centre yesterday evening and made an appointment for me to go this morning. They provided free transportation from my home to the centre (about 14 Kms away) and back. All I had to do was be ready at 9:30 am and the car showed up to take me and my dad. The actual procedure was 30 minutes long and we did not have to wait or fill out long forms.

I am very impressed with the whole process. It was cheaper than I expected it to be and I got more out of it than I anticipated out of the deal. The same procedure would have cost me a few thousand dollars in the US and I would have needed insurance and filling up a few dozen forms. The procedure remains the same and the machines are similar, so why should it cost so much more in the US? This is something for desilibertarian to mull over. With such royal treatment here why would I even think about living in a more expensive society?

Great questions!  Sadly, I could believe much of the cost differentials is due to required insurance due to inefficient legislation and regulation in the US and additional labor costs needed to process paperwork, legal protections, etc. caused by these inefficiencies. 

India's contrast shows what a highly competitive market could deliver if it was allowed to function in the US without the extent of government intervention we have right now.

1 comment:

thinking said...

I think some of the higher costs are due to the factors you mention.

I think another factor is price discrimination. Like with pharmaceuticals, Americans pay more than the rest of the world for the same product because we can afford to do so, and so in essence we subsidize the research and development of medicine for the rest of the world.

However, sadly, I think some of it is due to the greed of the companies. They charge more in the US because they can. The US medical industrial complex had better voluntarily moderate their pricing practices, or else they will find themselves at the end of an outcry from people here for govt intervention. I certainly don't want socialized medicine in this country, but it will only happen if companies abuse their pricing power.

I wasn't a fan of the Clinton administration attempts to socialize medicine, but it was interesting how during those years the inflation rate of medical products all of a sudden got a lot lower. The industries knew they were being watched and may face a political backlash.

Stories like this one only add to the political anger against high medical pricing.