The fact that health care is exorbitantly high in the US, is an open secret. In fact, in terms of health care cost, US is the third most expensive country in the world. As per 2015 OECD health statistics, healthcare related spending, in terms of a fraction of the GDP, was 16.4%, almost double than the OECD average in 2013 (“OECD Health Statistics”, 2015).
However, if you look closer, you will get a different picture. Although public healthcare-related expense in the US is comparable to the OECD average, it is the private health care, which covers more than 2/3 of US population, that contributes significantly to the high health care expense in the US. Also, unlike most other countries, in US hospitals and ‘for-profit’ organizations like private health insurance companies, control health care services’ price, not the government.
This has resulted in the unreasonably high price to maintain the high-profit margin along with excessive spending on marketing and administration. The impact of this high administrative cost is huge as it amounts for roughly one-fourth of total hospital spending in the US (Himmelstein, 2016).
Due to the propensity of litigation, doctors in the US tend to exhibit a behavior of ‘defensive medicine’ ordering excessive diagnostic tests which aren’t essential to make the diagnosis (Sekhar & Vyas, 2013). This results in the additional burden on already stressed US healthcare system. Lastly, medicines cost higher in the US compared to other developed countries as government funded largest payer of prescription drugs, Medicare, has no power to negotiate drug prices with the manufacturers (Whalen, 2015).
Himmelstein, D. (2016). A Comparison of Hospital Administrative Costs in Eight Nations: U.S. Costs Exceed All Others by Far. Commonwealthfund.org. Retrieved on 1 December 2016, from http://www.commonwealthfund.org/publications/in-the-literature/2014/sep/hospital-administrative-costs
This is an article written by Hannah Finn, an https://essayshark.com/ professional writer.
OECD Health Statistics. (2015). www.oecd.org/health. Retrieved on 1 December 2016, from https://www.oecd.org/unitedstates/Country-Note-UNITED%20STATES-OECD-Health-Statistics-2015.pdf
Sekhar, M. & Vyas, N. (2013). Defensive medicine: A bane to healthcare. Annals of Medical and Health Sciences Research, 3(2), 295. http://dx.doi.org/10.4103/2141-9248.113688
Whalen, J. (2015). Why the U.S. Pays More Than Other Countries for Drugs. The Wall Street Journal. Retrieved from http://www.wsj.com/articles/why-the-u-s-pays-more-than-other-countries-for-drugs-1448939481