spends an additional 8.6% of its GDP on healthcare, compared with only 2.4% by other countries.īusiness Column: That big Bezos/Buffett/Dimon healthcare initiative is already bogged down in blatherīack on Jan. is an outlier is in spending by the private sector, through commercial health insurance. As the Kaiser Family Foundation reported, the spending by America’s public healthcare programs very closely matches that of other developed countries, at about 8.4% of GDP. All three public programs did perfectly well in controlling costs, and still do.Īll place limits on reimbursements to doctors and hospitals, some more stringent than others. They only had to look at Medicare, Medicaid and the Children’s Health Insurance Program. Haven’s founders didn’t even have to look overseas for examples of national healthcare systems that had solved the mystery of costs. The founders almost had their finger on this aspect when they talked about creating a venture “free from profit-making incentives.” But that was never more than a glimmer in Haven’s program. Part of the problem is the profit motive that infuses much of American healthcare. “They mainly involve a variety of ways of saying, ‘No’ or at least saying, ‘No, not at this price.’”
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“We have good ideas on how to reduce costs,” health policy expert David Anderson of Duke University told me at the time of the Haven launch. paid the highest prices, by far, for drugs. The same goes for pharmaceutical prices - the U.S. Anderson of Johns Hopkins and the late Uwe Reinhardt of Princeton, titled: “It’s the Prices, Stupid.”Īmericans had fewer hospital admissions per capita and shorter stays per admission than people in other developed countries, they pointed out, but paid more per admission and per day. The solution was set forth in a seminal 2003 paper by Gerard F. There’s no mystery about why America’s healthcare system is so expensive - roughly twice the cost, per capita, of the average spending in other developed countries. If that were so, then their venture might have been truly ambitious.īut it’s not so. The flaw in the billionaires’ reasoning was that controlling healthcare costs required some kind of deep magic that only they could access. There were a couple of endearingly all-American aspects to Tuesday’s announcement of a joint venture by Jeff Bezos of Amazon, Warren Buffett of Berkshire Hathaway and Jamie Dimon of JPMorgan Chase to reduce healthcare costs.
Business Column: Reducing healthcare costs doesn’t require Bezos/Buffett/Dimon magic: Every other country already knows how
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