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What Makes the US Healthcare System So Expensive?

The healthcare system in the United States is one area that can be challenging to comprehend. Many healthcare research paper topics are published on America’s medical system. Still, individuals are wondering why healthcare is becoming so costly these days, especially as the institution has come under increased scrutiny in recent years. This is particularly true for corporate health insurance policies, which can significantly deplete a business’s financial resources.

It’s essential to recognize the causes of the high cost of health insurance. You can find strategies to lower your health insurance costs for yourself and your personnel by having a better knowledge of the system.

This piece will go into the factors driving up the expense of healthcare coverage and suggest some suggestions to help your corporation reduce expenditures. Hopefully, after reading this post, you will have a complete grasp of healthcare costs.

The Seven Key Reasons Why US Healthcare System Is Expensive Than Other Countries

1.      Fares in the US Swing Massively

Due to the system’s intricacy and the absence of any established fees for health services, practitioners are free to determine their pricing. Based on the provider (private health insurance or federal programs like Medicare or Medicaid) and location, the cost of given hospital services might differ dramatically.

2.      Costly Technological Developments   

Every day, technological developments take place in all sectors of the economy. But none of these has a bigger impact on good or service prices than technological improvements in the healthcare sector.

Healthcare researchers predict that between 40 and 50 percent of yearly cost increases can be attributed to either technological advances or increased use of existing ones, based on the Hastings Center.

The American healthcare system can frequently swiftly supply the most recent and cutting-edge technologies that Americans desire. But efficiency and excellence have a price. For instance, the FDA approved the da Vinci Surgical System in 2000, which is a robotic surgery system produced in the United States. The exceptionally high prices connected with this innovation, however, are one of its principal drawbacks.

3.      American’s Acquire More Medical Care

There are many individuals in America. The country’s population is getting close to 330,000,000 as of 2021. That is a sizable population, and they all require medical attention. In addition to having a larger population than the majority of other nations, Cutler claims that “Americans acquire more medical treatment than individuals do in other nations.”

Furthermore, a person living in the United States who suffers a cardiac arrest is far more prone to get open-heart surgery compared to the majority of other nations. This isn’t only in terms of coming to the doctor for a test or a routinely planned appointment.

Regardless of the amount of risk, in the U.S. you are certain to be advised to have surgery, and you may simply locate a facility that can execute it. The habit of being a little too selective about who undergoes medical treatments contributes to the rise in the overall expense of treatment in the United States.

4.      Drug Prices Are Climbing

Americans generally spend nearly double as much on prescription medications as people in other industrialized nations. In contrast to Europe, where drug costs are government-regulated and frequently based on the clinical effectiveness of the prescription, excessive drug prices are the single biggest sector of expenditure in the U.S.

The U.S. spends a median of $1,443 per person on drugs, as opposed to $749 paid by the other wealthy nations analyzed, despite there being minimal regulation of medication costs. The cost of drugs in the United States is 256% more than in comparable nations.

5.      The Pay for Doctors and Nurses Is Higher

As of 2020, the median wage family physician salary in the United States was $214,370, and the ordinary specialized salary was $316,000, significantly higher than the estimate in other industrialized nations. Additionally, American nurses earn significantly more than nurses abroad. A nurse in the United States typically makes around $74,250 per year, as opposed to $58,041 in Switzerland and $60,253 in the Netherlands.

By demanding preapproval before seeing an expensive specialist, U.S.-controlled treatment plans (HMOs and PPOs) may be able to reduce healthcare expenses. Another way to cut costs is to use a healthcare professional rather than a family physician.

6.      Administrative Expenses

The healthcare system in the United States is extremely complicated, with different regulations, financing, enrollment deadlines, and out-of-pocket expenses for employer-based coverage, private health insurance obtained through healthcare.gov, Medicare, and Medicaid, in all of their various forms.

Customers in all of these markets have a variety of insurance levels, deductible insurance, controlled treatment plans (HMOs and PPOs), and service charge options from which to select. Pharmaceutical prescription coverage with its categories of coverage, premiums, copays, or coinsurance may or may not include in these policies.

This requires service providers to comply with a plethora of usage, labeling, and invoicing restrictions. And the majority of administrative expenses are attributable to these operations.

7.      Hospitals Are Profitable Businesses

31% of the expenditures for healthcare in the country are related to hospital treatment. A 2019 study published in Health Affairs found that physician prices increased significantly more slowly between 2007 and 2014 than the prices for outpatient and inpatient hospitalization. Hospital spending increased by 6.4% to $1.27 trillion in 2020.

Hospital surgical treatment costs are significantly higher in the United States than in other nations. For instance, the average cost of an angioplasty to open a clogged blood vessel is $6,390 in the Netherlands, $7,370 in Switzerland, and $32,230 in the United States. In a similar vein, cardiac bypass surgery in the United States costs $78,100 while it only costs $32,010 in Switzerland.

Final Note

Most other industrialized nations do this in part by granting the government more negotiation power when it comes to healthcare expenditures. Their medical systems do not require the extensive administrative expenses that increase prices in the United States.

However, by overseeing other nations’ healthcare systems on an international scale. The US government may have an impact on the kind of therapies used and patients’ access to experts or more expensive procedures. Although consumers might well have fewer options, prices are kept in check.

Furthermore, if you’re a medical student who is struggling with the appropriate research for USA’s healthcare system then opt for a college essay writing service USA-based Company. They help students in completing their research-based assignments with 100% originality.


DP.2020. Medical Research Topics and Aims for Students. Online Available at: <https://www.dissertationproposal.co.uk/research-topics/medical-research-topics/> (Accessed: 9 November 2022). Shrank, W. H., Rogstad, T. L., & Parekh, N. (2019). Waste in the US health care system: estimated costs and potential for savings. Jama322(15), 1501-1509.

Ahsan Khan
Ahsan Khan
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