Why the US has the highest health care costs in the world

Americans spend significantly more on health care than any other country.

According to the 2022 Medical Expense Index (CHI), recently released by Bridge Patient Portal and Medical Web Experts, the US spends $10,921 per capita, ahead of Switzerland ($9,666) and Norway ($8,007).

The disparity in how much the US spends compared to the 60 countries included in the CHI is even greater for prescription drugs. Treatment costs are 1,309.48% more expensive in the United States than the median of the sample countries, followed by Mexico (+153.92%) and Switzerland (+143.00%).

Turkey has prescription drug prices 70.21% below the sample median.

According to former FDA Deputy Commissioner Peter J. Pitts, prescription drug costs are not the most important driver of US health care costs.

“In the United States, hospital care ranks first at 31.4%, followed by physicians and services at 14.9%, ‘other’ personal health care at 15.5%, followed by prescription drugs at 9.7%. He told the Times:

A good indicator of how expensive health care is in the United States is the average overnight cost of treating COVID-19 patients, including labor, equipment, tests, and medications. It was followed by the United States ($20,939), Norway ($11,590) and Switzerland ($9,297).

Healthcare is an expensive social good worldwide due to its “third party” payment system. Health care providers pay by third-party, private, or government insurance, not directly by the patients they receive services. And this leads to inefficiencies on both the supply and demand side of the healthcare market.

Patients may pay excessive visits to their health care provider because they do not have to pay the full cost for the services. Health care providers may bill the insurance company rather than the patient, so there is an incentive to provide tremendous service to the patient.

The ultimate cost of health care depends on the nature of the health care market. In countries where the insurance market is monopolized, i.e. dominated by a single large insurer, health care is expected to be cheaper than in countries where the insurance market is made up of several small insurers, which are highly competitive.

The explanation is simple.

Large insurance companies can negotiate more discounts from health care providers than smaller insurance companies.

The US healthcare market falls into the second category, according to Nicholas Creel, assistant professor of business law at the University of Georgia and State University.

“The main reason why health care in the US is so expensive compared to other countries is that we use private insurance more than the public universal option,” he told the International Business Times. “Because each private insurer has to negotiate with health care providers individually, they have far less negotiating power than a country where a single public institution represents the entire population. So they can pay significantly less than we do for the same services.”

According to the 2022 CHI, US citizens contributed the most to health care through tax and compulsory health insurance (700.62% higher than the median data set), followed by Norway (+509.22%) and Switzerland (+472.16%).

Nigerian citizens contribute at least 98.85% less than the median data set.

Creel sees an extreme lack of preventive care, another factor driving up health care costs in the United States.

“As many Americans avoid routine check-ups, visits to the doctor that can lead to early diagnosis and treatment of many conditions such as high blood pressure or cancer, these problems don’t go unchecked until they turn into many problems. Conditions that are more difficult and costly to treat. is,” he explains. “The old adage ‘An ounce of prevention is worth a pound of cure’ speaks to this logic, but America is still focusing on the latter rather than the former.”

The gap between what Americans pay and the average of a sample of countries included in CHI is too large to account for just a few factors.

Limelight’s Dr. Mahmoud Manzoor adds to America’s high cost of physician education.

“The cost of educating doctors in the United States is astronomical,” Manzoor told International Business Times. “They graduate with hundreds of thousands of dollars in debt and have to pay it back at private practice or hospitals. Then the costs will come down. There is talk of reducing it, but as long as colleges can make big bucks, putting money into these programs will change that. I’m not inclined to.”

According to Manzoor, the decline in charitable and not-for-profit hospitals over the past 60 years and the replacement of for-profit hospitals have added to the high cost of health care in the United States.

“At that time, many hospitals started out as churches or community nonprofits. As the cost and the need for technology grew, many hospitals were sold to for-profit companies,” he said. “They are starting to offer more specialized care at a higher cost. Hospitals, doctors, and health care generally have a ‘insurance pays’ mindset because of the way health insurance is set up. We charge an amount because we know that under our insurance contract we have to give a certain percentage discount or give some. Out of pocket or in excess of the insurance deductible.”

The debate over high medical costs is, as Pitts puts it, “on hold and slurred.” He thinks it’s time to add material and science to the conversation.

The CVS Health Foundation website states, “Our approach to social responsibility is directly linked to our purpose of bringing our hearts to every moment of health.” Photo: ipopba / iStock

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