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Six Reasons Why Healthcare Is So Expensive In The USA

Despite having a sound economy and often being hailed as one of the best countries in the world, the USA has reportedly failed to do something about its humongous health care expenses. As reported by Consumer Reports, if this sector were ranked as a country, the $3-trillion healthcare business would be the fifth richest economy. Though there have been several changes in laws and rules, healthcare is still expensive and inaccessible to the lower class — so much so that several households even live without insurance. It doesn’t work well for the government that the major part of the population is not happy with the healthcare industry. So, here are six reasons why it is so expensive:

Administrative Costs

The main reason the healthcare costs are so high in the USA is because of the terribly high administrative costs. It has been found that the administrative costs make up almost a quarter of the healthcare costs. Various studies show that the billing system is so complicated that just to ensure a good system, a number of billing clerks are required. Often, they even outnumber even the total beds in a hospital. In countries like Canada, where there is a single payer user system, having only a handful of billing clerks is sufficient to run the administration smoothly.

High Cost Of Medicine

Most countries have drug prices negotiated by the government. Hence, the medicines are cheap. But in the USA, the medicine cost is very steep because Medicare doesn’t have the right to negotiate drug prices. However, the Veteran’s Association and Medicaid have a say in this area which is why retirees and veterans pay the lowest price for drugs and medication. Also, for those individuals who are eligible for low-income benefits, they can also negotiate the Medicare Part D which controls the drug prices. It has been found that if all the insurance holders were given the chance to have access to low-cost medicines, then the government would be saving a staggering $116 billion every year.

Defensive Medicine

Though most doctors can diagnose a disease from the symptoms, they tend to overburden a patient with tons of tests just to be sure, and some of these are probably out of pocket expenses. A number of doctors who were sued for mistreatment over the years have led to this practice where most doctors are afraid and practice defensive medicine. A whopping $650 billion goes towards defensive medicine.

Expensive Mix of Treatments

Another reason why healthcare costs are so high is because of the expensive mix of treatments. This means that in the USA, patients go through more mammograms, MRIs, or C-sections than in other countries. These are expensive tests and methods, and in many cases are probably not required. Aside from this, getting treated by specialists can come with a hefty price tag. Diseases and issues that can be easily treated by primary-care doctors are often redirected to specialists who have a much higher fee. These treatments are usually done by primary care doctors in other countries.

Salaries And Rules

The salaries of each medical professional as well as the rules that drive them is another huge factor which increases the whole cost of health care. It’s possible that the high volume of specialists and the referral system are mainly responsible for this. However, a commission was formed in 2013 to solve this issue, and they had given a few recommendations to the Congress as well. However, those have not been implemented to date.

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The healthcare system has become a place where nothing has a fixed price. It all finally depends on the provider and the payer. Prices are often fixed depending on how much the payer can afford. Even prestigious medical institutes are often asked to name their prices. Thankfully, the Affordable Care Act has been able to stop this a bit and push back the humongous prices.

There are other countries with effective healthcare systems which provide the people with affordable medication and hospital care. The USA can definitely learn a few things from others and implement a few changes in the system. Lack of political support for the government when it wants to regulate prices is one of the main reasons for this. We still have hopes for a better future in this sector, but for now, things are still a bit grim.




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