- Question
Why is healthcare in the US so expensive?
Healthcare in America seems to be a lot more expensive than the rest of the world. From research and development for pharmaceutical drugs, to diagnostic tests, to doctors' salaries, everything in America has a higher price tag. In fact, in 2016, 17.8% of the country's GDP was spent on healthcare. Meanwhile, countries such as France, Sweden, Canada, Australia, and many others only spent around 11.5% of their GDP on healthcare-related reasons. Is the higher price of healthcare in America justifiable? What factors are driving the costs of healthcare and making it so expensive?
Healthcare personnel are paid much higher wages than in other countries
The healthcare administration and doctors are paid excessively high wages. For the simplest of procedures, a whole system of people is required. Many medical protocols and people have to be involved. Doctors have to increase their number of hours. All of this creates an avalanche of costs that ultimately results in skyrocketing healthcare costs.
The rising costs of drugs, facilities, medication, and premiums result in excessive fees
The everyday medical protocol in hospitals has established that a large number of tests be performed. Also, prescription drugs and premiums cost more due to monopolies or price manipulation. Hospitals explain that these prices help them provide exceptional care while patients argue that they are unnecessary and expensive.
Most of the healthcare sector is profit-oriented not service-oriented
Several companies and specialized workers allow the American healthcare system to provide exceptional care. This large number of players, combined with a for-profit type economic model, challenges the healthcare industry to provide the best standards of service. But this system also makes the healthcare system more expensive by adding extra capital and human costs to the process.