An honest answer annoys everyone every side of the issue, not just people on the left and right but people who watch TV
First up, Americans have amongst the highest wages in the world in one of the most efficient labour markets and of course labour efficiency is one reason for that high average.
Smart, highly educated hardworking people in the US earn more than their equals in most other countries and healthcare is very labour intensive. Not just doctors, but nurses and technicians have talent and training more than most people, so in a efficient rich country, their time will cost a lot.
The next thing is marginal benefit. The most cost/effective thing any health system does is vaccination. Very cheap, saves millions of lives and many expensive hospital admissions. However, once it is done, it’s done, so you move to the next most cost/effective, which is obviously less cost/effective, so the more we do, the less cost/effective each additional thing is. The US does a lot, which means that it’s well into the zone of low cost/effectiveness. Kidney transplants costs thousands for each year of quality life they give.
Ironically the more intelligently you allocate resources, the more quickly you use up the highly cost/effective allocations.
I didn’t buy the best car in the world, not even the best in the showroom, I picked a lesser car because even though I could afford a much better car it just wasn’t worth it to me.
Healthcare ain’t like that, if I’m ill I want the best and Americans are on average richer than most other people so the quality/price trade off is in a different place.
Possibly the best thing President Obama did for the cost of American healthcare was open up relations with Cuba, which has a lot of well qualified cheap healthcare professionals and is near enough to ship mildly sick people.
Also we need to be sophisticated about what we mean by expensive. Because the US as a whole pays for it’s healthcare through insurance, directly or through government it necessarily follows that as a whole it can afford what it has.
However, the bureaucratic mess and hard work by insurers to avoid paying claims means that the variability of healthcare costs is huge which means for many it is unaffordable at the point it is actually needed. I will come back to the bureaucracy, but the health insurance industry and government administration is greater than the whole British NHS socialised conception to grave system for a country 1/5 the size of the USA. Many whole types of non-medical job don’t exist in Britain, such as professionals whose job is to argue down bills from your own insurer.
Greys Anatomy, ER, Chicago Hope and other medical soaps
Every long term drama series needs a pool of villains and although people end up in hospital because of bad things done to them often it is found that the person who caused the misery is themselves a victim of some illness or social situation that caused them to be bad. That’s comforting, but to run for hundreds of episodes you need bad people who are just bad. 90% of the truly bad people are cost cutters. The evil accountants, MBAs, managers, etc who try to make healthcare cheaper. Invariably they make things much worse, we’re currently binge watching Grey’s Anatomy and without wanting to give you spoilers some of the most engaging and attractive main characters are actually killed by the cost cutters and several suffer long term effects due to cost cutting. Oh yes and some patients die as well.
So you dear reader are part of the problem. You watch medical drams and read news articles about where cost cutting or shortcuts caused misery and death and associate cost-cutting with tragedy. That’s because news about a process change that makes operations 5% cheaper never makes it to the mass media and makes for boring dramas. So you don’t want cost cutting so it doesn’t happen.
Another way it’s your fault
Americans eat badly, really badly. When I first visited America rather jet lagged I caught sight of things that looked like a bit like people but weren’t. Initially I parsed them not as people but as some sort of actor or clown dressed up in padding perhaps from a kids TV show or as a marketing stunt, after a second look it clicked that they were people, just astonishingly fat. In huge numbers. Diabetes is a horribly expensive illness, few people die of it quickly and the treatment together with the many things that go wrong (loss of bits of your body, heart issues, cognitive impairment, kidneys, etc) add up to large lifetime costs adding to insurance and other costs. Also of course there is heart and liver disease from gross overeating as well as the issues caused by the physical stress on the bodiy.
The West in general has this issue, but less of it and it’s most expensive in America.
Then there’s drugs a lot of drugs, opioid addiction and because of faith based government policy of both parties almost no effort to get addicts to stop being addicts because they’re bad people . That is an expensive faith morality to choose.
Illegal immigration is also an issue. People that can make across the border and then work in a hard job are going to be on average healthier than both the populaton they join and the one they leave. But having no access to preventive care and appalling working conditions means higher costs.
I doubt any of the above is contentious, so let’s look at things that will annoy more people.
The politics are toxic and is so often the case on Quora we compare the US to the UK, being both democratic capitalist free market English speaking countries.
In the UK, a key role of the National Health Service is to bully healthcare providers. Although not 100% a monopoly, any anti-trust regulator would see a firm with 93% of the market as one. That means it plays hardball with drug companies, equipment makers and the staff who even allowing for lower UK average pay, British healthcare workers are paid rather less.
This is a better deal than it sounds, the debts incurred by British medical students are vastly lower than in America and until relatively recently Britsh medical students didn’t have to pay anything.
We see from this why insurers and other healthcare business are prepared to spend any amount of money in bribes and propaganda to stop European style healthcare. Ironically the bribes to both Democrat and Republicans add to the cost of healthcare.
I happen to know the guy who is in charge of all National Insurance money in Britain, an economy rather larger than California, with nearly 1/5 the population of the USA. I live in a nicer house and drive a better car. Be clear that he’s not poor (we both live in what is called by people selling houses and the media as “the golden triangle” for its density of celebs, but he’s not rich either.
Yes the triangle points at my house, welcome to my world.
His job is important but one reason he’s paid less than the fatcats in US insurance is that the the NHS funding is run off the tax system, the actual workers collecting it could all fit in one midsized building. Look at the colossal scale of American health insurance firms, so many staff “adjusting claims” (ie not paying them), selling, marketing, lawyering, devising new insurance products, complying with regulations, reporting, managing payments to hospitals etc. There are more HR professionals just managing the staff in the US health insurance system than everyone collecting NI in Britain put together.
To get someone to run these complex and important organisation means you have to pay millions. I happen to know what my guy earns, some health insurance CEOs earn more in a year than he has earned in his whole life.
If you’re not wheeled in feet first hospitals demand a credit card or details of your insurer because debt collection is a significant activity at US hospitals. If you don’t have insurance,US hospitals apparently to simply make up a large number with no breakdown at all.
In Britain that whole huge, expensive operation of insurers, debt collection , etc simply does not exist at all, what passes for private health insurance in the UK is an optional top up that most people never use since it is in addition to state healthcare.
I mentioned regulation, which I first learned about from The West Wing which although fiction(sadly) contains some truly mad things, like the New Hampshire Board of Medicine, which as a Brit I found to be quite funny as well as stupid. I’m sure the NHBS do their best, but why do they exist at all ?
Britain, a country of 63 million has one system for each type of medic. The US has more than 50. Is blood different in New Hampshire than New York ?
That is symptomatic of the political issues that drive health costs. Some level of the US government gets lobbied (or as we say in Britain “bribed”) and creates a group of well paid regulators who now have a budget to pay their own bribes and if threatened with removal go to the media with horror stories. Politicians get patronage (and thus bribes) by appointing senior regulators and don’t want ot lose that patronage/income stream. In the UK the politicians couldn’t even tell you their names.
This menas compliance with regulation is jaw droppingly expensive in America because it has so many sets of regulations, registrations, laws etc. Britain like other countries with socialised healthcare has one
This is not just a private sector thing. The UK has no equivalent of the Veterans Administration, it doesn’t need one because British solders already have access to free healthcare when they leave. It follows that not only is much money saved from bureaucracy, but you don’t get the common situation where veterans are denied healthcare because of the staggering incompetence of the VA in keeping records. The UK does have a few specialist medical units to deal with the injuries veterans get, but that’s it.
In rough numbers the bureaucratic overhead of the US healthcare system (insurance, cost shifting, government involvement) is comparable to the entire healthcare budget for Britain, a country of 63 million people.
Then of course we have anti-vaxxers. I’m in two minds about them. Not being a moron, I regard their cruel stupidity with horror, but evolution is not nice and neither is it for the benefit of the evolved and there can be no more efficient means to raise the intelligence of the human race than for stupid people to let their kids die. They die and suffer at great expense. Anti-vaxxers are a mostly US phenomenon. Cruel and expensive, especially when the diseased children of pro-plaguers spread their infection.
In the UK, the corrupt anti-vaxxer doctors have been banned from ever practicing medicine. One of the hundreds of medical boards in the US has let them loose on American children. Cruel and expensive.
In Britain, a regular news item is of the form “X will save the NHS Y million per year”. This can be anything from getting people to sit up straight to having some test. Because the NHS is paid for by every single person who happens to be in Britain (we have a VAT sales tax of 20%, you can’t escape), measures to reduce demand are seen as unqualified good and so have political and bureaucratic support and more importantly, funding.
In Britain, Japan, Russia, Canada and Europe healthcare is far more aimed at children, seeing this as more humane, but it is vastly more economically efficient since if you treat earlier then costs are lower. In the US healthcare is aimed at older people because they have insurance, votes and powerful faith groups are so obsessed with abortion and contraception that they simply ignore children dying for lack of healthcare.
Hence America has one of the worst child mortality rates in the world, not just worse than developed countries but overlapping with what President Trump describes as “shithole countries”, but at the same time spends more than any of them because American children are often only treated after something has gone terribly wrong, which aside from the suffering and far more frequent deaths, is much more expensive.
The dealing with emergencies rather than prevention is a structural issue in the costs. A huge overhead is different elements (ER units, county hspitals, insurers, employers, private hospitals, medicare, etc) trying to shift costs onto other parts. Again this is not just bad for patients, it means treatments are more often a function of who gets landed with the cost rather than which gets the job done best and delay makes the eventual fix more expensive.
The UK has one National Health Service, segmented by geography to make it’s huge size vaguely manageable. So there is very little drive for any part of it to move costs to others, it happens, but is tiny compared to a “system” where cities, counties, states, insurers, employers, VA, hospitals, social services et al all try to get the others to take a given burden.
Gun violence is also an issue. The USA averages 15–16 thousand gun deaths per year, some of course incur no healthcare costs because they’re DOA, but you can easily spend $100,000 on trying to keep them alive. Add to that around 75,000 gun injuries per year. Gun injuries frequently lead to long term, expensive healthcare costs.
The UK like nearly everywhere else that isn’t actually at war has less gun violence, if it had the same population as the USA, you’d expect it to have 15 thousand gun death per year, actually it would have 300.
Employers have no say whatever in NHS healthcare, though some offer extra insurance. The idea in Britain that your employer can have a dream where his invisible friend told him that contraception was wrong and so you can’t have it is so bizarre that when I’ve shared it with Brits they’ve either not believed it or made a harshly racist comment that accurately reflects the vastly lower education standards in America.
…which is another factor. More educated people consume less healthcare and American high schools under-perform most of the developed world. Educated people are better at looking after themselves and so cost less. Faith based fake “healthcare” is rare in the UK & Europe, so the systems don’t often have to cope with children damaged by their parents faith over science.
Faith is part of the problem more generally as faith groups are a powerful lobby against rational healthcare policy as the status quo provides huge amounts of money, patronage and power.
Britain has an iron rule that any person seeking contraception will be given it, subject only to their personal health. Doctors who have harangued women or refused contraception on faith grounds have been disciplined and/or struck off and not allowed to practice any more. Part of this policy is Gillick Competence which says in effect that a girl under the age of consent who asks for contraception has by the very act of asking for appropriate precautions proven that they are competent to be given it. By law both boys and girls are given compulsory sex education lowering sexually transmitted disease and abortion.
In America, faith groups have sabotaged health education, in the UK it is cited as as yet another bad thing priests do to children.
This saves a colossal amount of money in healthcare as well as stopping untold human misery and substantially lowering the violent crime rate since unwanted children of young parents in any society are on average more of a problem.
As Brit I regard pretty much every American politician of any party as hopelessly corrupt. In the UK any politician who took a fraction of what a US politician takes from heaalthcare “lobbies” would be gone the day it was discovered, quite possibly in prison, certainly the subject of TV documentaries and jokes. If they took it to make the NHS pay more, it wouldn’t even be a whole day.
All British politicians have used the NHS, some only use it, either because of their finances or for political reasons. A few years ago a British conservative Prime Minister was accused of not supporting the NHS, his opponent was silenced by the response that his life ha been saved by the NHS. Can you imagine a US President or Senator or Bishop using the same healthcare system as ordinary people, except if they’ve been shot and there is no alternative ?
Of course commitment is not the same as competence, the NHS has not always benefited from political oversight and being larger, its screwups are breathtaking, but on average it is vastly more efficient.
The corruption means Americans pay more for everything bought by the government and has astonishing levels of regulation on things that no one else regulates, for instance Brits are amused to discover that many people who cut hair are regulated as if they were nurses.
Britain, like all other developed countries except the US has a social safety net. If someone is damaged in the course of healthcare they are not left to die on the street regardless of whose fault it is. Thus insurance payouts for malpractice, real or imagined has to be enough to pay for their damaged lives and healthcare. People who make damages awards know this and because America has a efficient labour market the lawyers who seek damages are very good at their job. There are damages in socialised systems but the numbers are vastly lower.
Being smart people American healthcare professionals are thus very defensive, ordering expensive tests and procedures to cover their backs, since the jump in insurance costs from a claim is less to them than the tests.
It is standard for US hospitals to add a “handling charge” to drugs, equipment et al, which means that they actually make more money from over-testing and excess procedures whilst saving insurance.
In the UK and most other socialised systems, this demented incentive simply does not exist. The job of a manager in the NHS is to get the most done with a finite amount of money.
NHS hospitals and doctors don’t need to spend money on sales and advertising, I don’t have a source for how much US healthcare providers spend on advertising, but from seeing the ads it must be real money. The nearest the UK experiences is fake medical jargon in shampoo ads.
Which of course leads to the rationing issue.
The NHS rations healthcare, it has a group of highly qualified people called NICE whose job is to say in effect “it’s not worth the cost of treating people with X using Y”. The US rations healthcare as a function of your wallet, who you work for, and for government funding political group you belong to like older people or those with AIDS who get more money than children because Americans vote that way.
Fact is that healthcare has no upper limit in demand, if you fix sick people they just get sick again and since medicine is a world of patching up, the person who is sick this month is quite likely to be sick with something else next month.
If you’ve read my other posts on Quora, you may notice that despite being a card carrying member of the Conservative Party, I’m not a fan of the Republican party.
A worked example of why is the issue of the late Professor Sir Stephen Hawking, who Fox News watching Republicans believe would have been left to die under the NHS. In fact his life was saved by heroic and expensive efforts by the NHS which he himself pointed out at length several times.
His parents were not rich but in the USA his treatment would have cost milliions, no way could they have afforded it and until he suddenly became famous, was earning a modest wage as an academic.
Much of this is politics as well as economics and because President Obama was rather popular his changes are seen by Brits as good. That’s because they haven’t looked at the mess, the lack of cost control and the faith based cruelty to women and children. Any European government who proposed something like that would never ever win an election again.
The idea that US politicians have their own healthcare system that citizens can’t access is something one associated with Communism not Capitalism.
So if you are an American, the costs are your fault. You vote for candidates who take bribes from healthcare lobbies, you attend a church that uses its power to frustrate healthcare reform and you care only about the healthcare you and your family get, not people in general and especially not children other than your own, and in the case of some faith groups not even them.
There is now a Bad Algo space, you may find it interesting.