Why is health care so expensive here?

Many people in the US wonder why our health care system is so expensive, and why costs are spiraling out of control even as more people find themselves without any insurance each year.

What many Americans do not know is that despite the high cost of medical care in the US, we typically rank midstream or lower in many standard measures of health care delivery (e.g., infant mortality rate and disability-adjusted life expectancy).

To give some perspective of how much we spend on health care in the US consider this: Switzerland spends the most per capita dollar on health among high-income countries. The US spends nearly double this.

Every industrialized country has some form of national health care that extends benefits to all citizens. The US also has a national health care system. However benefits are only extended to the elderly (Medicare) and to impoverished women, children, and people with disabilities (Medicaid).

The high cost of health care in the US is typically attributed to these key factors:

1. Rising costs of novel medical technologies (tests, drugs, procedures, therapies) and consumer expectations of access to them, whether not the technologies are indicated or proven to be effective
2. Administrative costs resulting from a complex multi-payer system
3. Extremely expensive medical care provided in emergency rooms to uninsured patients who have no access to primary care. These costs are shifted to payers, increasing insurance premiums
4. Aging, less economically productive, population that requires more medical care
5. Medical errors and complications from treatments that are serious enough to require expensive hospitalization
6. Underuse of the medical system: people lacking access to affordable care (e.g. uninsured) and preventative counciling are sicker and require more medical care in the end than people with affordable access