Have you ever received a medical bill? Have you ever seen someone’s medical invoice? These days, all it takes is one medical bill to send a patient into bankruptcy and that is an unfortunate truth. Medical care is the most expensive in the United States compared to the rest of the world. The system here operates differently than only countries. The main, distinguishing characteristic is the high costs for the individual. But, why? What makes health care in the United States so expensive? Is it health insurance prices? Could it be government regulation or lack thereof? How about the pharmaceutical industry?
1. Insurance System is “For Profit”
The biggest reason is the insurance system. The insurance system is mostly run by private companies and individuals pretty much pay for it themselves, even if their employer subsidizes some of it. Health care then becomes a privilege and not a right. Think about Medicare. Medicare, for persons 65 and older, is drastically cheaper because there isn’t a lot of time spent trying to deny the people the care they need. If only this were the frame of thought in private systems.
2. US Health Care is Highly Fragmented
It’s all so very confusing as the health care insurance system is quite complex. The insurance system has separate rules, funding, enrollment dates, and out-of-pocket costs for employer-based insurance, private insurance from Medicaid, and Medicare, and there are many tiers thereafter. There are high deductible plans, managed care plans (HMOs and PPOs), and fee-for-service systems. Not to mention, you may or may not get pharmaceutical coverage. Then you have to worry about deductibles and copays. This can be quite confusing for patients but now the providers must keep up. For providers, this means dealing with a laundry list of regulations about usage, coding, and billing. These activities make up the largest share of administrative costs which then spill back over to the consumer, otherwise known as the patient.
3. We Pay Per Service
Since patients may be charged based on the services they receive, a system known to the US, this is a major reason why our health care system is more expensive. We certainly have higher utilization of a lot of different services. In many aspects of US healthcare, medical providers are paid for volume and that fuels “getting an extra test”. If it is in the economic interest of the hospital, physician, or healthcare system when they are being paid fee-for-service, then more is better! As a result, this encourages overutilization. Therein lies the problem. Instead of helping patients get healthier so that the nation, as a whole, needs fewer procedures, we do quite the opposite! Interestingly enough, when it comes to social support systems and long-term care, the United States spends less than other countries.
4. Lack of Government Regulation
This is very challenging to disentangle and discuss but pretty much, the US Government does not regulate what most companies in the healthcare space can charge for their services. That can be insurance, pharmaceuticals, or for care itself. So hospital systems and pharmaceutical companies have the power to keep costs high especially since they are negotiating with multiple potential payers – the private insurance companies. If they had to negotiate with a single-payer, like the federal government, then there is more pressure to meet the demand in order to sell their services.
Bottom Line
The United States has the most expensive healthcare system in the world. We have the best healthcare, in my opinion. If you are sick, this is truly the place to be – no question there! However, it is not all-inclusive (across the population). The system is not everybody in and nobody out and that is not a great place to be.
“Of all the forms of inequality, injustice in health is the most shocking and inhumane.”
-Martin Luther King, Jr.
Communities can promote health equity by adopting policies, programs, and practices that support equitable access to quality and affordable health and social services. By addressing social determinants of health such as income, education, housing, employment, transportation, environmental conditions, and neighborhood conditions, policymakers can improve health, reduce racial disparities, and contribute to economic mobility. This has been a discussion since I was in medical school (and that was over 10 years ago). Clearly, change feels near but it somehow still feels like it is a long time coming.
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