Three Reasons Why USA Health Care is So Expensive? 

Suppose you become sick and in need of emergency health care! What will be your immediate step? You will go to the hospital, and the doctor will give you some tests, right? But do you know if you live in the US, then the total cost of your ER visits could be over $6,000, which is way more than other countries in the world! In fact, the average U.S. citizen spends more than $10,000 a year on healthcare. Despite spending the most on healthcare, the United States is lagging behind comparing other countries in terms of health outcomes! 

Why Is Healthcare So Expensive In The U.S.? (3 Key Reasons)

From Administration to general people, every person has pointed out different reasons for the countless cost of this American healthcare. Here, we are mentioning three main reasons behind US healthcare. 

1. Multi-Player System 

Before digging down which factor contributes the most to the cost of healthcare, let’s discuss from where all these problems have started all along! To function smoothly for any healthcare system, it requires a set of financing mechanisms. In most developed countries, this is typically done with government financing through taxation or social security, supplemented by private organizations, and also personal out-of-pocket costs! 

To manage all these resources, so far, two healthcare system has been noticed! One is a universal health care system where everyone is under a basic healthcare service. It’s accomplished under either a government health coverage system, a private health insurance system, or a combination of the two!

And another one is a single-payer system, where the government holds all the cards at hand! This means in this case government is responsible for paying all of your health care claims, using money collected via taxation! Right now, 17 countries use a single-payer system, whereas 43 countries like Canada, the U.K, and Germany have their own universal healthcare!

Like all these countries, you might have thought America surely had adopted any of these two systems, right? Well, according to the data, the answer is partially correct! Remember, we have told you earlier the definition of a single-payer system, where the government is responsible for paying all health claims! Apparently, it can be achieved without covering the entire population. 

That means any country can have one or more single-payer programs, and for the US, this is all that happens! Here, some people get combinational single-payer coverage, whereas others get private coverage or no coverage at all! But federal government programs like Medicaid, and Medicare should be there to save you, right?, as all of these are considered single-payer systems?

Yes, this is where all problems start! To get Medicare coverage, all you have to do is get old, like the age of 65 or become a person who has some physical disabilities! And if you have these eligibilities, still you may not get all of these services. If you fail to show that you are a legal resident living in the United States for at least five consecutive years!

After hearing all these, if you are thinking about Medicaid, which gives coverage to low-income people, then here come the big hurdles that you have already missed! Though Medicaid is considered as a single-payer system, the actual truth is- this is jointly funded by the federal government and the governments of each state. That means the funding comes from government and private health insurance on both sides! Hence, when it comes to private insurance, facts like drug formulary and higher premiums never leave any chance to increase more out-of-pocket costs for American citizens!

2. Drug Regulation Policies 

However, according to a recent report, it was estimated that 14.5 million Americans Signed up for Health Insurance under the Affordable Care Act. So why do more than three in four adults in the United State think the costs of prescription drugs are unaffordable?

Though the US administration couldn’t save American citizens from out-of-pocket costs they ranked themselves number one in science and technology. In fact, comparing others, this country is considered to be the best at developing new drugs and medical devices. After hearing these, you might have thought to do more research and the best quality drugs; pharma companies have no choice but to increase drug prices more, right?

Well, here comes the harsh fact that may be shaken up you a little! If your father has conditions like arthritis or psoriasis, you may have heard of the medication named Humira! The heartbreaking part is buying two Humira Pen kits; you need to spend 4,480 U.S. dollars on average, which is way more than any other nation! But do you know what makes this medicine cost different by country? If you look over Europe, which is the second-largest pharmaceutical market after the U.S. Where governments negotiate directly with drugmakers to limit the prices that their state-funded health systems have to pay. But in the US, the situation is quite the opposite! In this case, the U.S administration only evaluates the QA/QC part regarding medicine, they don’t regulate medicine prices! In fact, pharma companies have the all power to set drug prices!

3. Limited Choices 

Apart from all these factors, facts like drug formulary limit the choice of drugs that patients need most! The reason for this is found to be very much simple as the drug formulary is designed by insurers, so people who get a specific medicine in the 1st half of the year don’t mean they will get the same type of drug at the end of the year! 

Even as private insurers pay most medical costs in the US, so the majority of the cases deals like negotiating discounts between private insurers and third-party pharmacy-benefit managers sometimes generate unfavorable issues for patients’ sides too! 

This is again responsible for a scenario where $67 billion was paid out-of-pocket by patients for all prescriptions filled in retail pharmacies in 2019.Even due to cost, one in five adults in the U.S. were found who failed to complete a prescribed course of their medicine.

And lastly, remember we have told you earlier that drug prices vary in different countries? Apart from price, a drug that is accessible in the US market doesn’t mean it will also be available in other countries! Countries like Australia will often refuse to cover drugs that they don’t think are worth the price. However, if some of you manage to buy these expensive drugs on your own then here comes the bad news that you never thought about.

During the inspection, other countries’ regulatory agencies usually reject some drugs if they fail to prove the potential outputs to justify the price that drugmakers want to charge. Whereas in the united states, those drugs directly come onto the market due to lack of regulation. That means you might have bought an expensive drug that has less additional benefit.

We are pretty much sure that this seems to be confusing to you but according to a Vox report, the Zaltrap drug which was launched in 2012 for treating colorectal cancer, cost about $11,000 per month! Yes, this is twice as much expensive as its market competitors! But the most heartbreaking part is according to the doctor; this drug does not offer any additional health benefits.

Wrapping Up

After hearing all these, if we want to describe the US healthcare system in one line, what will be the most accurate answer? Yes, you have guessed, right! The US holds a most fragmented health care system, where pharma companies and private buyers regulate the cost like other kinds of stuff such as computers or clothing! And we can not wish that summon a marvel hero like doctor strange for reforming this broken system. However, a clear-cut idea about what we are consuming or what type of coverage insurers are currently providing can somewhat save you from the hidden costs.

Elinore Barton
After graduating with a degree in biology, Elinore Barton has been a research analyst in the health and pharmaceutical industry. Along with her work, she’s also an aspiring writer and has produced influential findings through her writing. With her published works, she intends to help others maintain their health by improving their awareness of healthcare and nutrition.


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