Cardiac catheterization, which involves inserting a long, flexible tube into an artery or vein and threading it through to the heart, is used to diagnose and treat cardiovascular conditions. Patients who are having a heart attack often receive cardiac catheterization. In the United States, the average payment negotiated by private insurers for cardiac catheterization is $5,061 (International Federation of Health Plans 2016). The average payment in Australia is $487, and the average in the United Kingdom is $4,046. The average Medicare fee for outpatient cardiac catheterization is $2,549 plus a physician fee ranging from $149 to $448 (depending on the nature of the procedure).

High private insurance prices represent a fundamental reason that healthcare is so expensive in the United States. Switzerland also has private insurance, relatively high prices, and the second highest healthcare costs in the world. However, an abdominal CT (computed tomography) scan averages $461 less in Switzerland than in the United States, a colonoscopy averages $697 less, and an appendectomy averages $9,890 less (International Federation of Health Plans 2016). With some exceptions, most healthcare prices are much higher in the United States than in other rich countries. (This discussion is about amounts paid, not amounts charged.)

These high prices and the process that leads to them have many consequences. Out-of-pocket costs are much higher in the United States, and serious illnesses can result in medical bankruptcy. High prices increase private health insurance premiums, and many Americans cannot afford private insurance. Furthermore, private insurers increasingly rely on narrow networks of providers to get better prices. This reliance on narrow networks makes getting care more complex and can expose patients to high out-of-pocket costs if they get care from an out-of-network provider.

Discussion Questions

• Why are private prices so high in the United States?

• How are commercial insurance prices set for hospital services?

• How are Medicare prices set for physicians’ services?

• How are Medicare prices set for hospital services?

• Should governments be involved in private price negotiations?

• Would consumers be better off if healthcare prices were nationally negotiated?

• Are other countries’ governments involved in healthcare pricing?