Nope. That isn't what does it.
Performing the occasional additional MRI is not what makes an MRI so expensive in the first place. And malpractice insurance covers most of the monetary penalties of getting sued.
The cost of defensive medicine, combined with malpractice insurance, was only 2.4% of medical costs in the US in 2010. It hasn't ballooned since then.
The real problem is that health care is not well served by the profit motive, because patients don't have the option to shop around. If you have a heart attack, you're not going to spend 20 minutes bargain hunting for hospitals online. The EMTs are not going to transport you to one hospital which has a low cost for its emergency room, and then to another that has a half-price sale on stents.
This is also apparent with drug prices. There is a genuine need for pharmaceuticals to spend big on R&D, and factors like patent expiration and generics mean they have a limited time to earn profits. However, we've also seen in recent years how these claims are used as a cover to gouge patients, who have little or no choice but to pay for specific drugs.
Yes, there are times when you have a week to get that CAT scan, or you can choose between a brand and generic. But most of the time, you don't have a choice of treatments, you don't have time to find the discount doctor, you can't get treatments on sale, you don't get coupons for amoxicillin, you can't choose aspirin when you need chemo.
The element of choice, which is so critical to a healthy market, doesn't apply to health care.
Yeah, there's a problem with that article. It doesn't actually back up the headline claim. It just issues it as fact.
That claim comes from the Institute of Medicine, which says the real problem is that doctors aren't doing proper follow-up, don't have enough continuity of care, and that digital records would be a big help. (Reminder: Requiring digital records is a part of the ACA.)
Most of the that is in the elderly population. They see lots of doctors, who don't always coordinate, and the patients don't always keep good track of things (or can't). They receive unnecessary treatments, that barely extend life and don't improve quality of life.
I believe they have a point, but anyone who thinks that we can cut 1/3 of costs with better follow-up and digital records is almost certainly being... optimistic.
Most of that is Medicare, too, so it's not driving up insurance costs. And just running more tests doesn't make the tests more expensive.
Equally important is that single-care systems have similar issues -- e.g. the NHS only started siloing patient records in one digital location last year -- but their costs are still significantly lower than the US health care system.
Neither the article you linked, or the IOM report, backs up that claim.
Yes, that's the chargemaster.
You know why hospitals have that? It's because those costs are a starting point for negotiations with health insurers. The poor saps without insurance get slapped with the full costs, unless they know to negotiate -- and aren't in a strong negotiating position.
It's another way that the profit motive drives up costs, because both the hospital and insurers are gunning for profits.
