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why does healthcare cost so much in the us

BY The United States has, easily, the most expensive health-care system in the world, but that hasn't translated into better outcomes on a variety of fronts. In 2013, 17. 1 percent of the U. S. gross domestic product was spent on health care, which was 50 percent more than France, the No. 2 country, according to a 2015 analysis by the
Americans also spend more out of pocket on health care, the Commonwealth report said. That report estimated the average U. S. resident spent $1,074 in 2013 on out-of-pocket on health care, for things like copayments for doctor s office visits and prescription drugs and health insurance deductibles. "Only the Swiss spent more at $1,630, while France and the Netherlands spent less than one-fourth as much ($277 and $270, respectively)," the report said. Quora Questions are part of a partnership between Newsweek and , through which we'll be posting relevant and interesting answers from Quora contributors throughout the week. Read more about the partnership. from, Public Policy Analyst Why doesn't the US government force the healthcare industry to slash costs? Aside from the more general problem of lacking authority to force the health care industry to slash costs, the simple fact is that U. S. voters dont necessarily want the government to do that! The federal government is one of enumerated powers, so it doesnt have the authority to command private individuals to do something just because the government thinks its a good idea.

Laws have to have some basis in the governments enumerated or implied powers or someone will challenge them in court and will succeed. (Yes, that can take a while, but were talking about a long-term problem here: the health care cost crisis in the U. S. has been going on for decades). So theres no means for the government to command the economy. There are plenty of avenues it uses to affect prices in any number of economic sectors, but outright price controls and floors (You may not charge more than $20 for a hamburger) are a bit of a rarity, with one prominent exception. (Care to hazard a guess? Answer at the bottom). The only workable possibility I can think of is using the governments contracting authority through Medicare and Medicaid. This isnt entirely - but its never been used very broadly because policymakers are worried about the economic consequences. Remember, politicians arent just focused on the health care cost crisis. Theyre also worried about coverage and access! And if Medicare beneficiaries are unhappy with whats happening to their benefits, they make their objections known! ( from a news report of former House Ways and Means Committee Chairman Dan Rostenkowski (D-IL) being quite literally chased out of a town hall meeting in his district.

Quite a few senior citizens were upset at the Medicare catastrophic care proposal hed spearheaded that raised their taxes to provide protection against catastrophic health care expenses under Medicare and Medicaid). Thus the other half of the equation here: the voters might not want costs to be cut. Or, slightly more accurately, voters tend to be just fine with everyone elses health care spending going down, but they get exceedingly wary about anyone touching their own health care spending. Its a basic expression of risk-aversion, and it crops up everywhere in public policy. Its part of the reason we have that famous aphorism from President Reagan: "A government bureau is the nearest thing to eternal life we'll ever see on this earth! " The worry is principally that cutting health care spending will reduce access to needed health care services. If you think about it in the long-term, that makes perfect sense: lower physician payments will eventually mean fewer (or possibly even less intelligent) people going to medical school, because they can make better money with fewer hours doing other things. Lower hospital payments will eventually mean decaying hospital infrastructure and possibly a staffing crisis, since so much of hospitals payments covers nursing care.

Lower prescription drug payments will eventually mean lower incentives for pharmaceutical and biotechnology companies to develop the next generation of lifesaving cures, and people like having their medications! Now, you can critique all three of those points a bit on any number of grounds. Im not here to debate the substance of those concerns so much as acknowledge that they exist among the voters. And after decades of hearing about how any cut to anything in government represents a meat axe being swung, or how any cut to Medicare is one party or another pushing Granny off a cliff, its really not surprising that voters are wary of the government forcing spending cuts! Never mind how hard the health care industry works to protect its payments, of course Health care reform of just about any type is going to require people to give up something, whether its taxes, expansive health care benefits, or (if theyre providers), some portion of their revenues. None of these is easy to do, politically speaking. Answer to price floors/ceilings question: the federal minimum wage! Its a price floor on labor. originally appeared on - the place to gain and share knowledge, empowering people to learn from others and better understand the world. You can follow Quora on, and. More questions: : : :

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