Gary Crooks: U.S. health care not a bargain

The EpiPen outrage may cause you to believe that health care costs are out of control, and you’d be right. But the biggest increases happened decades ago, and the public shrugged it off.

Health care costs are much higher in the United States than other countries, and they have been for a long time. Believe it or not, health care inflation is lower this decade than in the previous four, and it is expected to remain below the long-run average into the next decade, according to a Kaiser Family Foundation analysis of data from the U.S. Center for Medicare and Medicaid Services.

The inflationary rate for 2015 was 4.4 percent. It’s expected to rise to 5.3 percent by 2021 and fall back to 5.1 percent in 2024, when it will complete an 18-year run of never being higher than 5.5 percent (2006 to 2024).

It averaged 5.5 percent during the 1990s, the decade of the maligned managed-care plans (HMOs and PPOs). But consumers revolted against insurers constraining networks and services to lower costs, so health care inflation rose to 8.6 percent in 2002.

And before that? Hoo-boy. Better grab your EpiPen, because it’s breathtaking. Health care inflation was 9.9 percent in the 1980s and 12.1 percent in the 1970s. This was the era when America really distanced itself from other countries on health care costs, but, oddly, the public backlash was muted.

That’s because in our nation of third-party payers, the prices are effectively concealed. You pay some. An insurance company pays some. Unlike car mechanics, most doctors can’t tell you how much their services cost.

Take a look at EpiPen. The price went from about $100 to $600 in a short span, but the response of the drugmaker, Mylan, underscores how the exorbitant price of U.S. health care is papered over.

Mylan said to consumers, “Relax. Here’s a coupon.” It’s standard procedure for drug companies. Never mind that insurers pay full price and eventually pass that cost to employers, who respond by offering more high-deductible plans, which means their workers pay more out of pocket.

But expensive health care is worth it, right? Best in the world, say politicians invested in the status quo. Sorry, but no data exist that support this. Furthermore, studies show that as much as one-third of medical care is unnecessary, and the needed care we do receive is poorly coordinated, which squanders about 30 percent of spending, according to the Institutes of Medicine.

But one person’s inefficiency is another person’s profit.

The reality is that patients in other countries are charged less for health care services and drugs across the board, because their governments make it so. That two-pack of EpiPen costs about $100 in Canada. Other nations aggressively negotiate prices. An insurance company does not have that kind of leverage.

The VA bargains on drug prices. Medicare does not (Congress forbids it). The VA gets a lower price.

To show how there is strength in numbers, consider what the California Public Employees Retirement System, which represents 450,000 people, has done. Since 2011, CalPERS has cut costs by 20 percent for many procedures, such as knee and hip replacement surgery, colonoscopies and cataract removal, according to the New York Times. CalPERS does this by establishing a price it is willing to contribute for particular procedures. If patients want a higher-priced hospital, they have to pay the difference.

As a result, business has increased at the lower-cost hospitals, and the high-end facilities have lowered prices to try to regain market share. What CalPERS is doing could be done on a grander scale to drive down costs with aggressive bargaining, if the government would allow it.

But first, you have to be outraged, and then sustain it. Because health care lobbyists are in the ears of our leaders every day, and they can’t be shooed away with a coupon.

Opinion Editor Gary Crooks can be reached at garyc@spokesman.com or (509) 459-5026. Follow him on Twitter @GaryCrooks.