Rick Scott, the Florida governor, blames “out of control” government spending for a decade of “crazy, crazy, ridiculous prices” — the same kind of inflation he is seeking to curb with the state’s $2.5bn privatisation of Medicaid.
“Americans should be furious with the price of healthcare,” Scott told the Guardian. “If you look at what the average, inflation-adjusted healthcare costs are in Europe and what they are here in America, our healthcare costs are just ridiculous.”
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Scott said that the amount the US government spends on healthcare dwarfs that in other countries, an argument echoed by House speaker Paul Ryan. But it turns out he may be overstating the disparity and what Ryan is referring to.
America’s health insurance spending as a share of GDP is double that of other wealthy nations, according to the Organisation for Economic Co-operation and Development, while the US spends much more on prescription drugs.
“Is this so unreasonable?” he said. “I’m at $5,000 a year of out-of-pocket drug costs. Why does that matter to Americans?”
He pointed to his record as governor on Medicaid reform as evidence of his commitment to the issue. Last month, the federal government renewed Florida’s waiver, which allows Scott to cut overall Medicaid spending and bring down costs by transferring them to private insurance companies.
“Our primary goal with this Medicaid reform is to save taxpayers money by moving patients to more efficient health care delivery and better health outcomes,” Scott said. “And I’ve got a plan that, if you listen to what Congress is doing, is the only sustainable path to lower healthcare costs, more patients, higher quality care.”
Other nations typically spend on average twice as much on healthcare per person as the US. In the UK, the Institute for Fiscal Studies recently estimated that healthcare spending per person was 62% higher than the US in 2013. In Sweden, the annual budget has grown from an average of 5,135 Swedish kronor (roughly $650) in 1990 to 7,802 kronor (about $1,170) in 2013.
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The organisation for Economic Co-operation and Development (OECD) said the biggest discrepancy between the US and other rich countries is the fact that the US spends more on prescription drugs per capita than all other countries combined.
American hospitals also consume 2% more money than those in other rich countries, according to the OECD. The disparity – between the time a hospital waits to get reimbursed and the treatment they actually get paid for – occurs especially in primary care practices.