“Three Reasons Healthcare Costs are Extraordinarily High in the United States”
Why is Healthcare so expensive in the United States? There are several of reasons on why healthcare is expensive. In the United States, the three main reasons for extraordinary high costs in healthcare are: Administrative costs, Drug costs, and Defensive Medicine. Healthcare has become very expensive in the U.S. averaging about twice as much as it does in other countries.
The number one reason for high cost in the United Stated is the Administrative cost. The Administrative costs for leading our healthcare system is extremely high. There is approximately one quarter of healthcare expenses that is related to administration. For an example, when you visit your physician you are not just paying for his or time, you are also paying for other medical personnel’s that works in billing and coding for processing bills and insurance claims. This is the reason why 30% of medical bills go to administrative costs. According to the National Institutes of Health, it found that “administrative expenses totaled $156 billion in 2007 and estimated that this amount will reach $315 billion by 2018”. Americans in the United States receive more medical care and treatment than anyone in other countries, which requires and increases administrative work.
The second leading cost in healthcare is Drug cost. The U.S. pays three times on average more for their drugs than any other country. Drug manufacturers in the U.S set their own prices and other countries don’t. In most countries, the government negotiate drug prices, or they choose not to cover medications that are too expensive. U.S. citizens believes that the rise in drug costs are unreasonable high. For an example: Between the years of 2008-2014, the average pricing for most brand name drugs increased to 128%. The estimated total for the United States was about 13% and that was due to a shortage of drugs, increased research costs and limited competitions.
The third reason for high cost in healthcare is Defensive Medicine. Defensive medicine has an estimated cost of $46 billion in the U.S. About 70% of physician practice defensive medicine. The prices and percentage are high because physicians are afraid they will get sued. Even when the physician is positive that they know what the diagnosis are, they still order multiple test to decrease a malpractice case. Defensive medicine increases healthcare costs without improving the health outcome.