6 Reasons Health Treatment Is So Expensive In The United States

Healthcare in the United States is roughly twice as expensive as almost any other developed nation.  The U.S. healthcare industry would be the world’s fifth largest economy among all the countries in the world.  The expense of this financial burden for each and every household due to extra expenses, higher premiums,  is greater than $8,000. The healthcare system in the United States is ranked 37th in the world. So even with all of this money being pumped into the U.S. healthcare system, why is healthcare so expensive? Below are 6 reasons  why health treatment is so expensive in the United States.

1. Administrative Costs

The main reason that healthcare is so expensive in the United States is because administrative costs for running the healthcare systems are very high. It is estimated that 25% of healthcare costs in healthcare are due to administration. An example of administrative costs are the billing specialist that are needed in the U.S. system to determine how to bill given the complicated requirements.

2. Drug Costs

Another significant gap in health costs between the U.S. and other developed countries is the price of medication. In a lot of other countries, the government negotiates prices with drug companies. In the United States, medicare was denied the right to negotiate drug companies. The only groups who can negotiate prices is medicaid and the veterans administration. If Medicare received the same discount as the other two groups, the federal government would save $116 billion over a span of 10 years.

3. Defensive Medicine

Another reason for the high cost of U.S health insurance is the practice of defensive medicine. Because doctors are afraid that they will get sued, they order multiple tests even when they are positive that they know the diagnosis. This of course costs more money.

4. Expensive Remedies

Also, residents in the U.S. visit specialists more often. Their fees are higher than primary care doctors even though they dispense provide the same type of treatment. A lot of the treatments that Americans see specialists for are treatments that are done by primary-care level doctors in other countries. Specialists cost more money, which increases the price for everyone.

5. Benefits and Work Requirements

Compensation and staffing also increase costs in healthcare. Medical specialists demand high reimbursements. In addition, using specialists excessively with the referral decision-making increases health care costs even more. There has been movement to reform the way physicians are paid. The National Commission on Physician Payment Reform adopted 12 recommendations for changes to get physician pay under control.

6. Branding

There is no right price for anything in healthcare. The doctor who can ask for the highest fees are the one’s that create a brand that everyone wants.

The Main Point

Most nations control costs by having the authorities play a role in negotiating costs for healthcare. Their healthcare systems do not demand the large administrative costs that push up pricing like the U.S.. Up until now in the U.S., there’s been a lack of governmental support for the authorities taking a bigger role in controlling healthcare costs.