Why is healthcare so expensive in the United States compared to other developed countries?

Question

I never understood this because other countries have free healthcare and we don’t! We get sick and it’s expensive to even pay for anything!

In: Other

Answer 1

The free healthcare systems in other countries have built in cost controls. In countries with a free healthcare system, that cost control typically comes from the government allocating $X per year to healthcare and the system tries to divide that up as best it can.

The result of this is that a lot of high-cost treatments that are widely available in the US are either completely unavailable in other countries or have a small quota for how many treatments can be performed each year. A good example of this is basically any major surgery on an organ, heart attacks, or strokes. If you’re going to need/have one of those things, you really don’t want it to happen to you in Europe.

In Europe, high cost stuff like brain surgery has very limited quotas that result in most people dying before they undergo it, while many emergency treatments for heart attacks and strokes simply are not available. In the US, chances are you’ll be able to get scheduled for a major, high cost surgery within a month. Similarly, if you arrive at the ER conscious, your chances of surviving a heart attack or stroke in a modern US ER are pretty close to 100%.

The reason that high cost treatments are more available in the US is the same reason that healthcare is more expensive – there is no cost control. After you’ve paid your annual out of pocket maximum (which is usually $7,500 – $12,500), 100% of your healthcare is paid for by your insurance company. If you’re old enough for Medicare or poor enough for Medicaid, then 100% of your healthcare is paid for by the government (and neither Medicare or Medicaid has an allocation mechanism like government programs in other countries do – Medicare and Medicaid just pay 100% of any eligible bill that gets sent to them).

Because there is no cost control in the US, costs get out of control very quickly. Adding cost control into the US system is politically unfeasible because it means that treatments that formerly were available will no longer be available, either because of quotas or cost.