Why pay more for one cup of coffee vs another? What gives?

Come to think of it, why did that crazy Northern Michigan graduate, Howard Shultz, move to Seattle to build that coffee empire affectionately known as Starbucks? And really, what is up with their crazy looking logo anyways?  Does increased cost guarantee improved quality or better outcomes from the cars we drive, the soap we use, or the coffee we drink?

Now I am not suggesting to travel to France in search of the best French Roast but then again, the French do outlive us.  (Hmm…could it be their coffee?)  Today they are ranked some 25 spots ahead of the U.S. in terms of life expectancy (8th vs. 34th).  Taking a closer look…not only do the French outlive us but their total annual cost of medical spending per citizen is less than half that of our cost in the Unites States ($8,233 for the US vs. $3,974 in France – Source: *OECD 2012 Health Data).

After a few more clicks on my trusty Dell (and a few more sips of coffee), I could easily find that France also has a significant cost advantage to the United States for many medical related costs from pharmacy (nearly 1/3 less vs U.S.) to ambulatory & hospital (nearly ½ that of the United States*).  As a matter of fact, in addition to France, there are a number of other countries that well outpace the U.S. in terms of life expectancy & lower medical costs. What gives??

Unfortunately, today, many of us are dealing with escalating medical costs.  Our premiums increase at work and our deductibles get higher trying to manage the cost of care when we need it.  When this happens, what is a person to do?  For starters, you won’t see me suggesting traveling abroad (just yet) for the basic healthcare needs just to save a buck or two.  However, I will challenge you to create a mindset of a healthcare consumer (vs. a healthcare user) and become mindful of what things cost for many of the common things you utilize healthcare for.  Why is it that some people will spend an entire weekend shopping for a $50 savings on their next TV and yet ignore the fact that there can be hundreds to thousands price difference on some of the most basic of elective or maintenance (reoccurring) medical needs?  Fortunately, we have an abundance of the best care right here in the United States but what you don’t know about the services that you have and the broad range of charges that are being billed might be costing you.

The U.S. has the 2nd and 3rd highest MRI and CT exam rate*, respectively, in the world and yet there can be a $1,000-$3,000 price difference for the same exact elective test within a 50 mile range in many parts of the United States – including Michigan.  Today, preventative screenings for important test like mammograms and colonoscopies are now 100% covered and might be a big reason why the U.S. ranks 1st with five year survival rates for breast cancer and 2nd for colorectal cancer (Japan 1st with France being 6th).  As good as this is, wouldn’t it be great if you could save over $2,000 for a follow-up colonoscopy (typically used for colorectal cancer screenings)?   When this is performed in the same calendar year, this cost is typically 100% allocated to the employee.  Did you know that right here in West Michigan, you could have the same test performed right across the street with a $2,000 difference in price?

The good news is that the United States has made some positive strides with “consumer” driven medical options and a great example of this is with generic drug utilization.  As a country, over 80% of all Rx utilization is for generic drugs.  Unfortunately, since the passing of the Affordable Care Act in 2010, generics have seen an increase in price of over 500% (Consumers Reports).  As a matter of fact, the second and third largest drug sales by volume, Lipitor and Plavix respectively, can find a cost difference of over TEN TIMES for the exact same drug & dosage at competing retail pharmacies within a 50 mile radius, costing $100 per fill (thousands annually) in unnecessary excess spending.

So, the next time you are off sipping away at Starbucks on a cold winter day, be thankful you don’t have to drive to Seattle to enjoy your next cup of coffee.   Even in Marquette Michigan (home of NMU), and pretty much anywhere else in the state of Michigan, becoming a healthcare consumer will more than pay for your next bag of French Roast.