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Why is healthcare in the US so expensive?
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Administrative costs are much higher in America compared to other countries

The healthcare administration is quite large and expensive in America. This is because administrators are tasked with the huge responsibility of protecting doctors and hospitals from legal complaints and insurance companies. Since there is an excessive amount of such claims in the US, the number of administrative people tends to increase and their salaries also become quite large.

The Argument

About 8% of all national health expenditures are spent on administrative costs.[1] For most other countries, these administrative expenses only account for about 1-3% of all health costs. America has an extremely complex and structured healthcare administration. They are the middle ground between doctors, primary health personnel, and insurance and medical companies. Hospitals, in a sense, do function the same way companies do. Doctors, nurses, emergency medics, caretakers, custodians, and many other health-related personnel are the employees. The administration is tasked with managing the human capital, giving out performance reviews, and shaping the hiring policies.[2] They also oversee the financial health of the hospital, and the billing and payment procedures. But their greatest responsibility lies in protecting the hospital and its workers from insurance claims and legal complaints. Almost 85,000 malpractice suits are filed against doctors every year.[3] Also, insurance companies tend to use jargon and technical terms to profit as much as possible. The healthcare administration is tasked with dealing with all of these issues and making sure workers can perform their jobs without being bogged down by finances and legal claims. Due to the complex healthcare scenario in America, many such healthcare administrators and required and they are paid handsomely for their services. This ultimately drives up the costs of healthcare even more.

Counter arguments

Administrative costs in America are not excessive. For any country with a large private health sector, it is necessary to have business-minded or legal conscious administrative staff. If doctors, nurses, and other caregivers were responsible for caring for patients as well as fighting legal complaints and insurance claims, the entire healthcare system would become inefficient and come to a complete halt. Administrative people play an important middle ground role. They help hospitals function but also hold them ethically and financially accountable. As a result, the large number of people employed in this sector and their salaries are justified.



[P1] America's healthcare system is extremely complex and involves many legal battles, which leads to much need for administrative work. [P2] This makes healthcare costs more without improving the system.

Rejecting the premises

[Rejecting P1] Administrative work is a necessary and important part of America's healthcare system and adds value to the system as a whole. [Rejecting P2] The high cost is justified.


This page was last edited on Thursday, 27 Aug 2020 at 23:54 UTC

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