Why American health care is so expensive

Because we price it so high.  Sure, that’s kind of a tautology, but, basically we charge way more for the same amount of medical goods and services as pretty much any other country.  And, since a lot of people are getting rich off that, it won’t be easy at all to change.  This great piece from Austin Frakt and Aaron E. Carroll is just over a year old, but, somehow, I only came across it last week.  Obviously, still as relevant as ever:

The United States spends almost twice as much on health care, as a percentage of its economy, as other advanced industrialized countries — totaling $3.3 trillion, or 17.9 percent of gross domestic product in 2016.

But a few decades ago American health care spending was much closer to that of peer nations.

What happened?

A large part of the answer can be found in the title of a 2003 paper in Health Affairs by the Princeton University health economist Uwe Reinhardt: “It’s the prices, stupid.

The study, also written by Gerard Anderson, Peter Hussey and Varduhi Petrosyan, found that people in the United States typically use about the same amount of health care as people in other wealthy countries do, but pay a lot more for it.

Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health and the director of the Harvard Global Health Institute, studies how health systems from various countries compare in terms of prices and health care use. “What was true in 2003 remains so today,” he said. “The U.S. just isn’t that different from other developed countries in how much health care we use. It is very different in how much we pay for it.”… [emphases mine]

There are ways to combat high health care prices. One is an all-payer system, like that seen in Maryland. This regulates prices so that all insurers and public programs pay the same amount. A single-payer system could also regulate prices. If attempted nationally, or even in a state, either of these would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies — and pretty much every other provider of health care in the United States.

Higher prices aren’t all bad for consumers. They probably lead to some increased innovation, which confers benefits to patients globally.

Short version: everybody who provides health care in any way is pretty much richer than they should be and everybody who consumes is poorer than they should be, compared to the whole rest of the world.  That needs to change.  And, yeah, some people will be upset.

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