Discover the three key reasons behind the high cost of health insurance in the US with our insightful explanation.
Reason 1: Administrative costs and overhead
The administrative costs and overhead in the US healthcare system are significant. The complexity of the system, with various rules and insurance models, contributes to high management costs. In 2021, the management costs of the US healthcare system were estimated at 1,055 USD per person.
The prices of drugs and the salaries of healthcare staff in the US are very high. For example, in 2022, the average salary of family physicians in the US was over 235,000 USD per year, while emergency physicians earned over 310,000 USD per year.
Hospitals in the US often try to avoid lawsuits from patients, which leads them to request more tests and imaging, resulting in higher medical bills.
The US invests significantly in medical research and technology, leading to advanced treatments and diagnostic tools. However, these investments contribute to the high cost of healthcare services.
Unlike in some other countries, the US lacks comprehensive price regulation for healthcare services and pharmaceuticals, leading to higher costs for patients.
Reason 2: High healthcare costs
The cost of healthcare in the United States is notoriously high. Many Americans face the risk of bankruptcy due to the inability to pay medical bills, especially during the COVID-19 pandemic. For example, a woman who was hospitalized for 9 days due to COVID-19 had to struggle to pay nearly $160,000. Another man was left with a $1 million medical bill after his father passed away from COVID-19. This high cost of healthcare extends to various medical procedures and treatments, with broken bones, physical therapy, and cancer treatments all incurring exorbitant expenses.
The cost of medical procedures in the US is staggering. For instance, the treatment of a hip fracture can cost over $53,000, while a CT scan can range from $500 to over $7,850. Even routine blood tests can have a price tag ranging from $40 to over $3,000. The cost of prescription medications is also extremely high, with insulin for diabetes costing between $530 and over $1,100, and allergy shots ranging from $600 to over $2,000 per year.
The reasons behind the high healthcare costs in the US are multifaceted. The complexity of the healthcare system, high administrative expenses, and the high salaries of healthcare professionals all contribute to the overall cost. Additionally, hospitals in the US often try to avoid malpractice lawsuits by ordering more tests and procedures, further driving up medical expenses.
Reason 3: Profit-driven health insurance industry
The profit-driven nature of the health insurance industry in the United States is a major factor contributing to the high cost of healthcare. Health insurance companies operate as for-profit entities, aiming to maximize their earnings. This can lead to higher premiums, deductibles, and out-of-pocket expenses for individuals and families, as insurers seek to generate profits for their shareholders. The focus on profit may also result in limitations on coverage, denial of claims, and other cost-saving measures that can impact the affordability and accessibility of healthcare for many Americans.
Impact of profit-driven health insurance industry:
– Higher premiums and deductibles for policyholders
– Limitations on coverage and denial of claims for certain medical services
– Cost-saving measures that may compromise the quality of care provided to patients
– Incentives for insurance companies to prioritize profits over the well-being of their policyholders
The profit-driven nature of the health insurance industry can create financial barriers to healthcare access and contribute to the overall high cost of medical treatment in the United States. This system has been a subject of debate and scrutiny, as policymakers and healthcare advocates seek ways to address the challenges posed by profit-driven healthcare.
In conclusion, the high cost of healthcare in the US can be attributed to factors such as administrative expenses, expensive medical treatments, and the lack of price regulation. Addressing these issues is crucial in finding a solution to the exorbitant health insurance costs in the country.
