The United States has the most expensive healthcare system in the developed world. Back in 2018, the average annual cost per person was $11,100. Compared to other developed nations (especially those in Europe), this number is incredibly high. Even among other expensive nations, the US still ranks as the most expensive.
For example, the average cost per person in Norway (another one of the most expensive countries) is just over $6,000 per year (i.e. nearly half of what US citizens pay). But why is the US so expensive? Are there any benefits to these dramatically higher costs? Below we delve into some of the main reasons why health services in the USA are so expensive, as well as some of the benefits (and negatives) of the US healthcare system.
Healthcare Costs in the US
Healthcare in the US is expensive, this is known worldwide. Compared to other Western nations, the US isn’t even in the same ballpark as far as affordability goes. But why is it so expensive? Well, there are many factors that account for the US’s high cost of healthcare, the most important of which are listed below:
- Administration – According to most industry experts, the costs of operation involved in running a hospital, clinic, etc. is one of the top reasons why healthcare is so expensive. The costs that US-based medical facilities pay to operate are much higher than those in other countries (with similar GDPs).
- Expensive Medications/Treatments – One of the other most important factors in determining the cost of healthcare in the US is just how much drugs and other treatments cost. Most other countries develop special agreements with drug manufacturers which allow for lowered prices. The US does not do this (only with the VA and Medicaid does it negotiate for lowered prices).
There are several other reasons why the US has the most expensive healthcare system in the world. One of them is the fact that doctors and other medical professionals practice something known as “defensive medicine.”
Because the US has such lax lawsuit laws/regulations, doctors are extra careful in regards to protecting themselves from malpractice lawsuits. This means ordering more tests, labs, etc. for patient