Why is healthcare so expensive in the United States?


Both prior to and after the election, prominent Republicans spoke about repealing the Affordable Care Act (ACA), privatizing Medicare, and making cutbacks to Medicaid. Costs of these programs are the purported justifications for why these plans are targeted for dismantle.

{mosads}The announcement that ACA premiums would increase by an average of 22 percent only fueled the political firestorm. This reflects a wider trend: the average middle-class family’s healthcare spending has increased 25 percent since 2007, while spending on other basic needs has decreased. 

However, another question should precede the issue of whether or not these programs should be cut or privatized, and it’s the question that neither Republicans nor Democrats want to talk about: why is healthcare so expensive in the United States?

During Obama’s presidency and the debates over the ACA, both parties touted healthcare as a market, the Republicans arguing that it will limit consumer choice, the ACA ultimately arguing that the law puts consumers back in charge of their healthcare. But this presumption that healthcare is a market, and that we are in charge, is a fallacy.

If it were truly a market, consumers could shop around for the best care, comparing safety rankings and overall value of the healthcare they needed. However, the healthcare industry notoriously shields fees not only from competitors, but also from us, the consumers.

For instance, in Washington DC, one hospital charges $115,000 for putting a patient on a ventilator, while another hospital charged $53,000 for the same service. While ultimately insurance companies and even the uninsured can negotiate rates, knowing the cost of procedures, and which hospitals provided the best outcomes, is critical information with which we as “consumers” are simply not provided. Yet a majority of healthcare providers can’t actually tell us the cost, even if they wanted to. In addition, a consumer has to know where to go to get this information.

According to the The Organisation for Economic Co-operation and Development (OECD), we pay more of our taxes as a share of GDP than many other countries that have universal healthcare — more than Switzerland, Canada, the United Kingdom, Australia, and Norway, among others. Government-sponsored insurance like Medicaid, Medicare, and Tricare are paid for our your taxes. In addition, we pay exponentially more in our own money for private insurance than in any other country in the world. That is, the overall cost of health care in the United States is exponentially higher than any other so-called developed country.

The quality of the USA’s healthcare ranks last among the top eleven richest countries. We’re not getting better quality of care despite the expense. A major indicator of quality of healthcare, the USA has the second highest maternal mortality rate among high-income countries, and the rate in Texas recently doubled. Of course, some of our providers, capacity and innovation is truly enviable; but overall, we’re not better off despite the costs.

The underside of why it’s so expensive has everything to do with fat profits for the healthcare industry, from the pharmaceutical companies whose profits rival big banks, to the massive hospital conglomerates and physician groups charging whatever they want in the absence of government regulation. When pharmaceutical companies charge egregious prices for life-saving drugs, we deplore the companies rather than pointing fingers at a government that allows companies free license to make our health into a commodity, no matter the cost. And why wouldn’t the government allow it? Some members of Congress have stakes in the healthcare industry, so they’re profiting too.

Congress — both Democrats and Republicans, represents corporate interests more than the very citizens that elected them. The wealthiest 10 percent of Americans have more influence over what passes in Congress than the rest of us. Meanwhile, 95 percent of all organizations lobbying the government represent the interests of the big corporations, compared to five percent representing public interest or labor unions.

Healthcare is so expensive in the United States because lobbyists within the healthcare industry ensure the government doesn’t regulate the industry. While the cost of drugs is skyrocketing, we deplore the cost of insurance. Even if you’re on private insurance, your taxpayer dollars are paying for the skyrocketing prices of necessary pharmaceuticals, which costs all of us more.

To be sure, in proposing a voucher system for Medicare, Paul Ryan is trying to curb egregious government spending. But cutting benefits to citizens means they will shoulder the burden, while corporations continue to make record profits at the expense of all of us. While the ACA has its merits, one of the main reasons it even passed was because it never threatened to control healthcare costs. Ryan’s idea about vouchers and cuts will do nothing to curb costs either.

It’s up to us to lobby the government and tell our members of Congress that profits before patients is completely unacceptable.

Noelle Sullivan is an Assistant Professor of Instruction in Global Health Studies and Anthropology at Northwestern University, and a Public Voices Fellow. Twitter: @ncsullivan

The views expressed by contributors are their own and not the views of The Hill. 

Tags ACA Affordable Care Act Healthcare Paul Ryan
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