Why Does Health Care in the U.S. Cost So Much?

This is an excellent question we each should ask ourselves every day. My opinion is all of us overuse the health care system and this practice drives up the costs of everyone’s health insurance premiums.

I also believe the reason our heath care costs are high relative to age between persons in China, France, Germany, Japan, United Kingdom is because we, as a Nation, are seriously overweight and this affliction, as weII as too much fat in our diets, leads to all kinds of serious health problems (heart disease, diabetes, colon and pancreatic cancer and internal organ failure) in our later years.

The following discussion will open your eyes and help you understand why all of us pay such an exorbitant cost for the health care we receive in hospitals and clinics in the United States.

 

Greed, is the primary reason.

 

IMO everyone is ignoring the real elephant in the room here. Health care costs are greatly outpacing inflation because of:

1. Pharma and medical equipment companies

2. The doctors and hospitals

Health care is NOT a free market.

 

Several contributing factors.
　
　
The government allows the industry to write the rules. Who's favor do you think they lean.
　
　
There is no competition, and insurance companies has created the environment that allows the industry to overcharge at ridiculously higher rates than a competitive environment would permit.
　
　
People are stupid fat pigs who over eat and eat the wrong kind of foods, full of chemicals/preservatives, steroids/growth hormones, and have been taught to mix foods that are consistently harder to digest, and absorb. This causes more problems that the industry makes billions annually creating unnatural medicines so they can continue to belly up to the trough and gorge themselves in an unnatural manner. Medicines that control blood pressure, cholesterol, triglycerides, etc... etc... do nothing to cure any problems, just keep the poor habits as the norm.
　
　
And last but not least the majority of the people in the medical field, are there to make money at your expense. Most of the doctors in the last 30 years are ditching the general practitioner field and going only in to specialties, IAW greed steers the industry now, when over 40 years ago most of the people were in it to help people. They are not taught to cure any problems they are taught to treat symptoms, so the situation is prolonged, and the need for medical assistance is compounded right up until the day that their overmedicating, misdiagnosing, and experimenting on you with drugs they get a kickback for prescribing the poisons that finally kills you outright.
　
　
The high costs, accelerates the pricing of everything that is involved as well, from schooling, medical supplies and pharmaceuticals, everybody wants their share too, and at the current rate of about 14% annually costs will continue to rise, at these alarming rates, and if insurance remains the way to pay for everything including a basic office visit, there will be no change in the trends that have created this giant money vacuum.

 

There are obviously a LOT of reasons why healthcare today is so expensive.

One reason that is generally overlooked and is one of the largest contributors, is the advent of so many new diagnostic, treatment, and procedure options. If you compare now to lets say 1979, a lot has changed. We now have diagnostic tools in common use such as MRI's and Cat Scans that detect major problems earlier and earlier. An explosion of pharmaceutical options exist now that didnt in 1979 etc etc.... The result has been an increase in life expectancy of about 6 years or so, but no one seems to want to focus on that aspect. This improvement comes with a hefty price tag. We can decide to limit costs if we so choose, but do be aware that doing so will severely inhibit new innovation.

 

You also need to look directly at a government funded agency entering the market and destroying competition.

 

>>>My opinion is that it is the 30% administrative mark-up. "Administrative" is health care industry-speak for CEO salaries and distributions to shareholders.

 

Phoebe......hmmm. For starters. Huge CEO pay comes from wall street, NOT the operating capital from a company. Secondly, stockholder dividends would be paid out of profit, which is calculated AFTER an administrative portion would be accounted for. Im skeptical of the 30% figure, but even if we take that at face value, ceo pay and stockholder dividends would have absolutely zero to do with calculating administrative costs.

 

Care to back that up with any facts?

 

>>>Depends on your accounting methods. I try to segregate administrative costs and profit in my business, but no matter how you slice it, stockholder dividends and CEO salaries have EVERYTHING to do with the high cost of medical care in this country. Dividends and salaries have as much to do with the cost of health care as alcohol and cotton balls.

 

Umm the facts are in front of you.

Medicare cannot go out of business and directly competes with private insurance companies.

What facts do you require?

 

Sarbanes Oxley would rule the day in any healthcare corporationthat is publically traded. This isnt a gray area

 

Medicare does not compete with private insurance for the most part. I really don't think insurance companies want Medicare's clientele. Medicare does a good job, cheaper than private for sure.

 

How does it not compete with private insurers?

You are making a lot of assumptions based upon nothing but opinion.

 

The economics of health care in the US are pretty simple. The government pays for almost 50% of care with about 20% of the money spent. The private sector pays for the other 50% with 80% of the money. Some 60% of all health care money is spent on the last two months of life, 2/3 of that from the private sector. Another 10-20% is spent on needless tests. All this to provide adequate health care to only 60% of the population, the other 40%, most with private health care, do not receive even adequate care.

The private health care market is opaque. Providers and insurers negotiate prices in secret and since these are represented as trade secrets it is impossible for anyone else to figure out costs and payments. The fee for service model of payment in the US and the huge consolidation of for profit provider networks allows providers to raise costs with little constraint. The fractured payer market allows providers to shift costs from insurers who can force lower prices to those who cannot to insure profits.

Health care providers are embarked on a vast expansion and new building that is raising expenses enormously with no concurrent increase in population or their incomes. Health insurers have no incentive to lower costs since lower costs means lower premiums and less profits.

To put it simply, the US health care system is designed to maximize costs and profits. It is not designed to provide health care, health care is only the vehicle for profit maximization.

 

How many private insurance companies are even pursuing the over 65 market? Not many that I see. Not just opinion, I have been in the pharma business and am a founding shareholder in a nuclear medicine / radiopharmaceutical company. I am pretty familiar with the way the system works.

 

The whole reason for Medicare was because there was no private insurance for people over 65. The actuaries did not think it was feasible to make a profit off of them. This is still true.

The only way the insurance industry could make money off of people over 65 was with a massive government subsidy and a mandatory policy program that would allow them to set premiums so they could exclude those most in need of care. In other words, the Ryan plan.

 

And I invented the Xray machine.

The over 65 crowd uses the same procedures that the under 65 crowd uses...that is competition in my book regardless of who is going after what crowd.

 

That's nice. I guess we should be grateful for our hotly competitive health insurance industry. They are doing such a great job keeping our premium increases to only 10-20% per year.

 

The simple answer is that there is very little paid for out of pocket and too much not paid for at all.

 

Actually, the insurance industry is the only element attempting to keep providers honest. The insured never even looks at their bill, let alone scrutinize it.

You cannot expect insurance companies to just pay everything and not see prices increase. The real solution is to have less insurance and more out of pocket payments, then you will see people be selective in use and question the bills.

 

Well yes & no to some degree. The relationship insurance and provider is not like that of say a manufacturer and supplier. The manufacturer will pressure the supplier for ever lower pricing. In health care the insurer can pass along the increased cost far easier than the manufacturer, he is still going to make his 30%. Indeed he actually benefits by higher cost.

Medicare, by virtue of it's size and much lower overhead, does do a much better job of managing cost increases. In our business one of the key questions is always "what is or will be the Medicare reimbursement" for this drug or tracer. Medicare sets the standard, everyone else follows though often at a higher reimbursement.

 

It's not just the fatties but also the smokers and reckless drivers and drug users and perverts that choose to lead dangerous life-styles and force responsible people like me to pay for their bad choices. And of course, there is also the illegals who get free health care at ERs.

 

It's simple.

Capitalist providers are screwing the sick. You have a system no other country does. If you adopted some of the economies most other countries have had for decades, your Medicaid and Medicare programmes would be affordable.

 

We have the machines that go bing!

[ame="http://www.youtube.com/watch?v=lusXJIfB4ys"]YouTube - Monty Python - The Machine That Goes Bing[/ame]

It boils down to corruption, greed, and needless (*)(*)(*)(*) and waste.

Health care is a terrible industry for the free market. The free market should be allowed to participate of course, but it definitely shouldn't be our main source of health care.