The real reason American health care is so expensive

The real reason American health care is so expensive


I cannot tell you how obsessed I am with this chart. It shows exactly what is wrong with America’s conversation about health care. On one level, you’ve seen this chart before. It shows health care spending as a share of the economy of a bunch of countries. There’s Germany and France and Japan and Canada and oh! There’s America. But now I want to add something you haven’t seen to this chart. This is how much of that spending in each country is private and how much is public. Here’s what’s amazing: America’s government spending on health care on programs like Medicaid and Medicare and the VA – our versions of socialized medicine. It’s about the same size as these other countries. These countries where the government runs the whole health care system! And then there’s our private spending. It’s the private insurance system that makes health care in America so expensive. Conventional wisdom says that the government is more expensive than the private sector. “It can’t say no. It’s corrupt, it’s inefficient, it’s slow.” “If you want something done right you give it to the private sector.” That is what we hear in America all the time. And yet here we are with the biggest
private sector spending the most. If you look at the data on physician visits and hospital discharges, you can get rid of one theory. Americans don’t consume more health care than people in these other countries. We don’t go to the doctor more than the Germans or the Japanese. In fact we go to the doctor less. The difference between us and them is that we pay more. Every time we go to the doctor for everything from an angioplasty to a hip replacement from a c-section to a pain reliever. In America, the price for the same procedure at the same hospital, it varies enormously depending on who is footing the bill. The price for someone with public insurance like Medicare or Medicaid is often the lowest price. These groups he covers so many people that the government can demand lower
prices from hospitals and doctors and they get those lower prices. If the doctors and hospitals say ‘No’ they lose a ton of business. They lose all those people on Medicare all those people on Medicaid. But there are hundreds of private insurance companies And they each cover far fewer people than a Medicare or a Medicaid. And each one has to negotiate prices and hospitals and doctors are on their own. And if you’re uninsured, you have even less leverage. Nobody is negotiating on your behalf. So you end up paying the highest price. One study found that most hospitals charge uninsured patients four times as much as Medicare patients for an ER visit. Other countries, they don’t have this problem. Instead of every private insurance company negotiating with every healthcare provider. There’s just this big list. The country, the central government, they go and they say, “If you want to sell to us, to all of our people, then here’s what you can charge for a checkup. Here is what you can charge for an MRI or a prescription for Lipitor. And so then whether that bill goes to the heavily regulated private insurance companies in Germany or directly to the government like in the UK. Each country is telling the doctor or hospital or drug company how much that bill will be. And because the government controls access to all of the customers. It’s an offer that hospitals and doctors and pharmaceutical companies typically can’t refuse. “I’m going to make him an offer he can’t refuse.” In America the idea is that you’ll be a consumer. That you’ll do what you do when you go to
Best Buy and buy a television. But that just doesn’t work in healthcare. It doesn’t work in healthcare because you often come and get health care when you’re unconscious, in an ambulance, when you’re scared, when it’s for your spouse or your child It is a time when you have the least bargaining power. You are not usually capable of saying, ‘No.’ You’re not knowledgeable enough to do it, you’re not comfortable doing it, or you’re not conscious enough to do it. That’s why in other countries the government is a person who can say ‘No’ for you. You can say, ‘No, that’s too expensive you’re going to have to lower your price’ because they do have that power. Anchor: A new push for single-payer health care right here in the US. Demonstrator: What do we want? Crowd: Single-payer! Demonstrator: When do we want it? Crowd: Now! Anchor: California and others are saying maybe we should adopt the European model. Klein: If we decided to create a single-payer system with one of these huge price lists in the US There would be nothing to stop lobbying from hospitals from doctors from drug companies. And those prices would get influenced. So we could end up with a single-payer system that is expensive. Even as expensive as our current system. It all depends on how much you negotiate down the prices and now in America these groups have so much power
because they are so rich. That it’s really hard to get them to bring down the prices. This is the irony of American healthcare: It’s so expensive that it’s become
hard to make it cheaper. All that money they make, that becomes political power. And years and years and years of overpaying – those are huge industries now. And they have a lot of influence in Congress. Under a single-payer system if we did drive prices down, doctors and hospitals they would be paid less than they are right now. That might mean some of them close or some go out of business or some move. It would be really painful. One person’s waste is another person’s essential service or local hospital or their income. But then single-payer it’s not an all-or-nothing choice. For instance, there’s a really interesting section of Bernie Sanders Medicare-for-all bill. Where he lays out this interim plan. It’s a plan he wants while he’s setting up his new single-payer system. And in that plan, he expands Medicare to cover vision and dental. And he opens it to nearly everyone. Not just people 65 and older. All kids go on Medicare automatically and most adults can buy in. That plan, on its own, it wouldn’t get American health care spending far down overnight. But it would at least begin to recognize what we already know and what most other countries already do: That health care is one of those things the government can do cheaper and better than the private sector.

100 Replies to “The real reason American health care is so expensive

  1. American healthcare is so expensive because the entire industry operates as a cartel, backed by the federal government by laws that make competition near impossible. It's no different than the educational system.

  2. How to fix it? Easy completely remove government healthcare and run completely on private and give out healthcare voucher depending on the person's yearly income and the only thing on that voucher is money nothing else so the person can go to any privately owned healthcare system. With barely any regulations on private healthcare

  3. Rather would pay for my own healthcare plan that fits me and my budget than have my taxes raised and have my money go to other people

  4. Health care providers may go out of business, but the personnel who make it happen: doctors, nurses, etc. They aren't going anywhere. They aren't going to throw away years of training just as a huge customer base opens up. It's the bureaucrats that will suffer. Less overhead means more efficiency. And that's the ultimate reason why. All those upper managers will go away. A dozen CEOs would be replaced by someone responsible to the people, not shareholders making a 1/10 of what they are today. Whole professions would be wiped out or massively reduced. Insurance adjusters for example. Because the health care industry is so huge, it has become entrenched. But it's greed will be its undoing.

  5. The real reason's American health care is so expensive-1. Greedy pharmecuticals2. Greedy health insurance companies3. Greedy politicians,and their political circus about it. 4 Greedy doctors and other health care personel 5. Billions of dollars the healthcare industry spends on advertising to the public especiallyfrom the pharmecuetical companies. 6. Malpractice7. FraudThe main reason is pure GREED. Put the care back into health care or stick it where the sun don't shine!!!!!  Its bankrupting everyone and its killing us. It needs to stop.

  6. I don’t think it is the lack of a free healthcare system that is at fault for this, I think it is the lack of competition in the private medical space. No competition means there is nothing to control how high the price is. So many people from other countries complain about how bad their free healthcare is. I’m a republican and I also agree that’s our healthcare system is bad, but, raising taxes to fix it is not the solution.

  7. Thank you for this accurate, simple explanation of why our health care costs so much. I wish it could be heard by every American.

  8. The people in the us pays multiple times more on administrative cost then in european countrys.
    Even Medicare und Medicaid did only have a fraction of the administrative cost from a private insurance

  9. Two years ago I dislocated my shoulder. When I arrived at the university health center I was crying uncontrollably, not from the pain, but because the health center people told me that I had to go to the E.R. to get it fixed even though I begged them to help me fix it.
    I could at least tell by the look in the doctor's and nurses' faces that they knew the situation was messed up since that was the reason I was sobbing.

  10. I got Mono and visited hospital for 3 short times cost me 14k while my buddy in Germany told me he and his wife got all medication for almost free.

  11. Greedy people is the answer.
    Crooked politicians is another reason. Makes me 🤮
    Shame on you people, only in the great USA 🤮

  12. This is an amazingly unsophisticated view of healthcare.

    But what do I know, I only have 30 years experience in health care and a doctorate degree in implementing health care change to benefit patients….

  13. I'm disabled and on charity care. At the time I visited the ER my disability application was in the years long process.
    I was told charity care covered ER. But later after a few visits i received a $4500.00 bill.
    They said that charity care doesn't cover ER docs. I was not aware of this.
    Now this bill is nearly half a year of disability pay.
    Disability for me is the same amount as if you worked full time at minimum wage.
    Which we all know that unless you live in rural poverty town you can't find rent that is affordable.
    The entire system is broke, this system created by people who are not representative of the people.

  14. One of the unique part of Japan’s national health care is it gears toward prevention.
    Standardized, annual health check/monitor is a common program, and it’s mandatory for most workers and students.

    To be able to detect an illness on early stage has save a lot of lives and yen for the health care program.

    Also, it allows people to know one’s health risk so they can change their problematic habit, again, it’s much easier to improve before it gets serious.

  15. It is because free market is not free. Healthcare in America is the most regulated sector in economy.There are incredible regulations at every level and part. FDA, OSHA, HIPAA, JACHAO, Federal and state health departments. There is incredible licensing at every level. In most cases, you cannot have a job in healthcare without a license. A single FDA trial costs about 100 million dollars. This creates huge barrier for small companies, startups and new discoveries. Small guys have no option except to get out, stay out or sell out to big guys. This is government provided, guaranteed oligopoly for big pharma. Competition is extremely limited by limited licensing for hospitals, doctors, equipment makers, instrument makers, nurses and paramedics. Big insurance companies are have guaranteed oligopolies, thanks to government, by not allowing buyers to buy insurance across the state lines. Consumers are also prohibited to buy drugs online from Canadian and other foreign retailers. You need prescription even for everyday medical needs for which virtually no country requires a prescription. Oligopoly of insurance companies has vested interest in keeping prices high enough to discourage self-pay. The worst part of this video is when you blame free markets for powerful lobbies. Really? How can any lobby be successful without the cronyism in big, corrupt and powerful government? This argument is actually screaming against the government. On the question of government run healthcare in other country, thanks, but, no thanks. We do not need rationing. What we need is to free healthcare from all government controls, regulation and interference.

  16. We need to attack the idea the the "free market" works in every case or that it works at all unless regulated. Where do people get the idea they have enough knowledge to make these health care decisions on their own? Are you going to shop around your gall bladder surgery? The very basis of insurance is to spread the risk over as many people as possible.

  17. Private insurance is expensive because the unfair competition by government run Medicare/Medicaid. In addition to that, in the US, the newest and best treatments (hence most expensive) are available, which are unavailable in the rest of the world. Thats why they spend more for doctors than any other country.

  18. Even though the hospital service is slow in the Uk at least it’s all for free. I couldn’t imagine having to pay just to get a checkup

  19. I'm Australian and we would have to have one of the best health systems in the world… and it's basically all govt. We do have private hospitals but the public system is fantastic.

  20. One problem with private health insurance is it uses poor young people that are struggling to buy a house and raise a family to subsidise rich old people.

  21. I've been ill for the best part of a year and they've decided I've got a rare autoimmune syndrome. I've have so many tests and scans I've lost count. I also spent eleven days in hospital after a heart attack. In the UK this has not directly cost me anything at all. The health service may have its faults but it is there when you need it.

  22. In my country, we have government clinics which costs only 0.24$ (when our currency is converted to USD). If you are a school student (I was in the boarding school, and my years in the teaching institute also is going the same way) and went to bigger, also government-regulated clinics, you don't need to pay a single cent for your treatment. The government pays for you. As of insurance, my father got it along with his job, and I got full benefits of it until I am 18, every one under the scheme does. If you as a student continues to pursue your studies in college, then your insurance will cover most of your treatments until you're 21. Government hospitals are cheap too, for giving birth to a child, treatment for cancer etc etc… with the insurance my family subscribed to if you choose to go to private hospitals (which IS more expensive, but far lower than US healthcare expenses), you will be paid 48.37$'s equivalent of my country's money per night and most of the expenses would be covered by them. Our healthcare facilities are world class too, so I am grateful for this and I hope the rest of us will appreciate this. Oh, and our education is free too up to our high school years; and mandatory (at least until high school, beyond that is optional) — we don't have to pay school fees and for textbooks (but we do have to pay for events, (in all schools, self set by the school) dorm and food (in the boarding schools))

  23. This year, Canadians could expect to wait 4.3 weeks for a CT scan, 10.6 weeks for an MRI
    Maybe 4 more weeks of my daughter's seizures could have saved me some money, and if rural hospitals were closed we could save even more money.

  24. I live in a third world country and each month I pay a really small fee for taxes for healthcare for working people (it's like a $6 per month goverment insurance) and our medical system, I will admit, is not the best YET it helps A LOT. Even for unemployed people we have another public hospital, and it is for free. Might not be the best healthcare system, but it's good.

  25. when people blame it on regulations I laugh, regulations in health care maintain high standards which are must in medical care anyway its not the same as say regulation on automobiles about how much pollutions it creates which will increase costs, that's an optional thing but ensuring the high quality care isn't. Even though I love the NHS the reason its so expensive is system rigged due to greed and doesn't allow the free market to drive prices down.

  26. 1. Health insurance companies along with property and casualty are heavily regulated. They only make 5 cents on every dollar.
    2. Private spending leads to innovation and R&D (America is #1 in this category)
    3. ITS NOT FREE – countries with single payer systems have very high taxes!!!!!!!!!! You are either paying for it out of your bank account or out of your paycheck.

  27. Shattered my knee in an accident, ambulance takes me to hospital then transported to another hospital because that’s where the specialist is, had two surgeries and it didn’t cost me anything, now I receive 80% of my salary until I’m able to return to work. This is right of every New Zealand citizen

  28. There is a full industry developed in order to bring Americans to Third World countries in order to them to have medical procedures there.

  29. Not the best but probably the best way to make American health care cheap is to start regulating cost of health care. E.g Cost of a curtain puffer, the cost of seeing a GP doctor (just to see without any treatments), the cost of an x-ray. Something as basic as that would help

  30. The costs involved in being a doctor in USA are far higher than in any other country. So 1) there is less doctors than it should be and 2) doctors have to charge more.

  31. Single payer that covers everyone is a good thing. Promises that the overall cost will go down will not be kept though unless overall utilization drops (rationing). That is not necessarily a bad thing. But it will be necessary to control costs. We will have to shift a lot of care from specialists to primary care providers. Reduce the need for defensive medicine with tort reform (responsible for a great deal of overutilization).

  32. If we get rid of the private sector we allow the government to control the price of the health care. Meaning higher taxes. They say just tax the 1% but then the 1% leave. Then middle-class Americans are forced to pay for other people’s health care. Getting rid of the private sector of health care is giving the government complete control. Thant’s exactly what our founding fathers made the constitution against. They made the constitution to keep to government from getting complete control.

  33. I have been to France and I am not a French citizen. When I was hospitalized for 2 weeks I never paid a single amount, all of the sevices were free. I never been to the US so I can't directly say that this is absolutely true but according to my relatives (California, New Jersey, New York, Texas, Las Vegas) who are American Citizens and some are Green Cards holders, they claimed they have high cost of taxes and I also observed that Frence citizens pay more or less the similar amount of taxes as the Americans depending on the state they are currently living.

  34. How hard is it to understand, things like education, healthcare and private prisons and other private incarcerations facilities should not be ran by private sectors, making money on peoples miss fortune is disgusting, and private prison are encouraging overcrowding, since more prsioners = more money, and there are deals between police and prisons, where they earn money on fellons, some officers even get bonuses when they bring someone in, healthcare insurance companies goal is making money that's their #1 goal, they don't care about you they just care about how much money they can rake in, it's time to get these billionaires outta politics, Bernie 2020 baby.

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