I understand that insurances covers part of the cost. However, the total cost (before coverage) is still much higher in America. Why?
Is the supply chain different? Are doctors and staff paid better in America?
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Our healthcare is a commodity…. Bought and sold to the highest bidder.
It’s also almost 20% of the flippin GDP…. So it’s too big to fail.
The US doesn’t have a single payer healthcare system so it doesn’t get any of the advantages of one. So the result is you get raw capitalism.
To start off you need to understand why laissez faire capitalism doesn’t work with healthcare. Free Market concepts assume that if a product is too expensive people will stop buying and costs will have come down to encourage people to buy. But for required services like healthcare you can’t do that because you’ll suffer or die, so the very concept breaks down. There is no natural pressure from the market to reduce costs, so you end up with costs that spiral upwards.
There’s an argument that insurance based systems actually drive up costs. When people don’t/can’t pay for medical care hospitals have to cover their costs somehow, so they increase their rates and the insurance companies in a sense get the bill resulting in higher costs overall.
This phenomenon also happens in the auto repair industry. Insurance providers are often charged *more* than the guy on the street for the same repairs after an accident because the insurance companies will just pay (to a point). So the entire industry has inflated costs because they were able to get away with it.
One of the advantages of single payer healthcare is the power of negotiation.
When a government represents every single person in the country and is the sole organization that can pay for medical procedures, companies have no choice but to bend over backwards to try to get that business.
You aren’t buying 10 replacement hips at 1 hospital, you’re buy 10,000 for the entire country at once. So that allows you to get prices down.
Another factor is regulation. The government can step in to limit and regulate the prices of things like drugs, undo monopolies and patents that are harmful to patients, and provide funding to local companies to make low-cost equivalent drugs. The government can also subsidize costs like education to encourage more people to become Doctors and Nurses when required if it is to the advantage of their citizens to do so. A government isn’t profit motivated like an insurance provider and that makes a big difference.
Then there’s preventative care. If medical care is too expensive people won’t get it until it’s too late. If it’s *free* (it’s not free, but you don’t get a bill at the end of it) then people are more likely to go to the Doctor earlier and for regular check ups. This reduces the likelihood of larger bills later.
For example if you get diagnosed and treated for diabetes earlier, then you don’t get expensive treatment later because it’s out of control.
Because there is no “system”. A system is designed. What we have are a thousand short term solution and “patches” to solve small parts of the problems. Now it is so complex, intertwined it is almost impossible to replace it with a “system” because the thing is so large and disorganized.
For example hospitals need money to help people. An individual has insurance. So now the hospital has to hire people to argue with the insurance people to argue who pay what. That all cost money which drove up cost.
Doctors work in “networks”. So your insurance agrees ahead of time low cost with their partner. But a hospital might not have enough staff so they hire doctors out of network. That results in high cost.
A hospital has a patient who can’t pay so the hospital has to raise more mo ey from those that do pay to cover those who can’t.
A doctor has to have insurance in case he makes a mistake. Medical lawsuits are super expensive so insurance rates go up. That them drives up cost.
Doctors start with hundreds of thousands of debt. So they can’t accept lower salaries. So that raises cost.
There is a shortage of doctors and nurses. This drives up cost.
Supply companies that sell bandages and medicine willl always charge the most they can. This can result in medicine being thousands of dollars a pill.
It has always been expensive so people expect it to be expensive so people accept it being expensive.
Insurance is paid through work so people don’t shop. They just accept what is handed to them. The business buying the insurance isn’t always interested in the lowest cost to the employee but the cost to themselves. Which push cost to the user.
Hospitals are run as a business so they need to make a profit.
It’s a thousand small problems. And lots of rules that were supposed to fix it but only sorta fixed it and made other problems.
American health care is paranoid about being sued for medical malpractice, so before doing anything they will run a whole battery of tests covering any possibility even extremely unlikely ones. Only once these tests are complete will they move on to treatment. When you combine this with Americans fear of hospital bills, Americans only seek treatment when the illness is at a critical stage, often making treating the issue more complex and expensive.
The profit motive.
Businesses exist to make money and healthcare is a highly specialized field that the majority of people know very little about… yet must access at some point.
This leads to over-charging, over testing, over treating those with the ability to pay at every step of the way. For those who can’t, it leads to shutting them out.
Capitalism, healthcare in the USA is a for profit business.
Combine that with the for profit insurance system.
Here s a study talking about it
https://www.aha.org/guidesreports/2021-08-16-anticompetitive-conduct-commercial-health-insurance-companies
In most of the world, health insurance is provided by the government as a basic social service like roads, police and firefighters, clean water, etc.
In America, health insurance is provided by private for-profit companies. As for-profit corporations, their #1 priority is “make more money this quarter than we did last quarter”, not “provide health care”.
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Hospitals aren’t allowed to turn people away for medical care, so paying customers end up paying for homeless, illegal immigrants, poor people, ect
It’s what the market will bear. Our choice is pay the price or go without care.
We have insurance to keep the real cost obscured so most of us don’t realize how much more our system is costing us until we get really sick. Then most of a middle or lower middle class persons weath is transfered into the hands of the wealthiest as they spend down all their resources to get the care they need.
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