That was the title of a famous article claiming that U.S. Health care spending is high because provider charges are excessive. Now, Ezra Klein (pointer from Tyler Cowen) brandishes charts furnished by an insurance industry trade group that purport to show spectacular differences in prices for services between the U.S. and other countries. The international comparisons could depend on how one handles exchange rate conversions.
On the other hand, the charts include comparisons between reimbursement rates of private plans and reimbursement rates from Medicare, with staggering results that cannot be attributed to currency conversion issues. For example, according to the trade association's charts, an MRI scan typically is reimbursed for $1200 by a private plan, but Medicare pays only $500.
Even more intriguing, the physician fee for a routine baby delivery is $2384 for the typical private plan, but the cost is only $1601 for a patient on Medicare. For C-sections, the costs are $2618 and $1812, respectively.
If these data are correct, then health care would be a lot cheaper if all of us were on Medicare. Also, women would be better off waiting until age 65 to have babies.