You might find "
Here's the real reason health care costs so much more in the US" a bit more detailed.
However, I don't find "It costs more because we get charged more." to be a REALLY satisfying answer since what it breaks down to is "It costs more because the providers are greedy and we don't have any choice but to go along with their demands.".
"It costs more because we get charged more" is not what I'm saying. You
will get an answer like that at many health policy conferences (phrased not in terms of charges, which are largely meaningless, but in terms of pricing:
"our system is more costly because we have a health care pricing problem.") That's a circular answer.
There are two components at play here: (1) what payers
pay (reimburse) for health care services, and (2) what it costs to deliver those services.
The former (1) is often what people think of as the cost of the system. We pay taxes to the federal and state government so they have cash to spend on health services, and we pay premiums or have our employers set aside a piece of our compensation to have cash to spend on health services. And then when we get those health services we often also kick in a share of the cash from our personal funds via deductibles, copays, or coinsurance. That's the money that gets collected from us to pay hospitals, doctors, and other providers when we get services from them. And when that money is transferred to those actually delivering the care it's doled out in accordance with pricing negotiated between the providers and the payers.
The latter (2) is what one might think of as the actual
costs of the American health care system. Health care is largely a service and delivering it has costs. For a hospital, for instance, those costs are primarily (~60% or more) labor costs but there are others: IT fees, food, postage, utilities, pharmaceuticals and medical supplies, etc. Hiring and retaining those people, paying those fees, keeping the lights on and the doors open so that you can provide the service costs money. Those costs are the actual costs of delivering health care in this environment. The money coming in the door from payers--the reimbursement ultimately provided from the pools of cash collected through premiums, taxes, and individual out-of-pocket commitments--has to be enough to cover those expenses. If they aren't, the hospital or practice or whatever closes up shop.
The prices providers ask is high because the cash flow they need coming through the door has to be high, and that's because the real costs of delivering care are high. That's not greed, it's reality.
There seems to be a perception among some that there's a great disconnect between (1) and (2) above: namely, that the amount we (the insurers, governments, and consumers buying care) pay is wildly higher than the actual costs that providers incur in delivering care. And that difference between the two must then be exorbitant profits for everybody along the chain. That would be great! Because it's an easy problem with an easy solution. If the money we're paying into the health care system through premiums and taxes is ending up in a vault somewhere so Scrooge McDuck can do the backstroke through it, then it isn't involved in patient care at all and clawing it back won't impact anyone's care or livelihood.
But they're
not wildly out of whack. Yes, there is some profit along the line (even non-profit hospitals need positive margins) and insurers surely take their cut. But ultimately we
pay more because care
costs more here. And that's because the inputs providers need to deliver health services--namely labor, but also certain supplies and pharmaceuticals--cost more here than other places. Heath care is nearly a fifth of our economy, a fact that goes hand-in-hand with the reality that it employs the plurality of people in this country--and that's not because the plurality of Americans are physicians. We can't simply rightsize what we
pay (1) to be in line with the rest of the world because our underlying costs (2), which those payments must cover, really are substantially higher here.
Health care is a sector that offers steady, good, high-paying work and is consistently a path to the middle class, particularly in places where other industries are disappearing. Said another way, it takes in a large chunk of the nation's income and spits it out in paychecks to the plurality of our workforce. That's a rather challenging "problem" to tackle. Framing this a story of "profit" and "greed" entirely misses the enormity of the task in front of us.
