Why Are Health Insurance Costs In The United States So Expensive?

Introduction

The United States is home to some of the world’s best doctors, advanced medical technology, and cutting-edge healthcare services. However, it also has the world’s highest medical expenses, and insurance costs are continuing to soar.

Why do patients in the United States face such exorbitant costs for their healthcare and insurance, though? This article explores some of the primary reasons behind these expenses and takes a look at some tips to help you mitigate the financial burden.

Why is healthcare so expensive in the United States?

While there can be no denying the quality of care patients receive in the United States is amongst the best in the world, the cost of healthcare can be extortionate. Some of the primary reasons for these soaring expenses include:

What to Expect During an Annual Wellness Exam

One of the key driving forces behind healthcare expenditure is administrative costs. Research estimates that administration duties such as billing and insurance-related activities account for up to 30% of healthcare spending.

Duke University Hospital in North Carolina is often cited as an example of this excessive administrative process, with the hospital employing 1,300 billing clerks – 400 more than the actual number of beds it has available!

Being able to reduce these costs to align with international standards could potentially save patients and the U.S. healthcare system billions of dollars annually.

Drug Prices

Pharmaceutical prices in the United States are also markedly higher in comparison to other countries. In 2023, the United States spent an average of $1,564 per capita on pharmaceuticals, more than any other country in the world. This disparity is primarily due to the lack of regulation in drug pricing, allowing pharmaceutical companies to set prices that are significantly higher than they are in other markets.

Cost of medical services

Another major reason for spiraling costs is the fees associated with medical services. These include things like physician salaries, medical equipment, and medical supplies which are often far greater than they are in other countries. For example, the national average cost of an MRI performed at a radiology clinic in the United States is $1,325 and the same scan preformed at a hospital the costs double if not tripled. Whereas in Canada, it is almost half that at $762.

Technical and medical innovation

The US healthcare system invests heavily in the latest medical technologies and treatments. While these advancements help to drastically improve patient outcomes, they do also contribute to the escalating costs. Research has found that technological advancements account for up to 65% of the increase in healthcare spending. Anther argument, is why all the spending for treating health conditions instead of educating on Wellness for the body? Which then there would not be a need for the spending this drastic. Simple answer is Doctors are taught in Med School to diagnose, treat with Pharmaceutical and preform surgery. They are not taught Wellness education or even about Parasite treatment which would stop a Patient from being a customer. A Patient with a health condition keeps them a paying customer, which is how the system makes it money.

Overutilization of services

The overutilization of services means the excessive or unnecessary use of medical services, and in America, patients often receive more medical care and diagnostic tests than they do in other countries. This can usually stem from defensive medicine to protect against potential malpractice claims, patients demanding specific tests, and fee-for-service models incentivizing more services than needed. Doctors are taught in Med School how to be pushy sales people using verbiage such as "highly recommended" or "greatly advise" which can seem to a Patient that the service is needed vs recommended.

Many health insurance companies are pushing back and not covering many services because of this.

How can patients reduce their impact?

Invest in Wellness with an Open Mind

One of the most effective ways to help health insurance out-of-pocket costs is to shop for a Functional Medicine Doctor which is a Patient-Centered, holistic approach to healthcare. This type of Doctor is focused on root causes not about treating the symptoms. Traditional Doctors are Money Centered, only treating the symptoms not addressing the root-causes.

Prices can vary widely between providers, so taking the time to research and compare prices for the right Doctor is key.

The less healthcare you need the less out of pocket you will have. Also, research procedures and services can help you to save significant money. There are various online platforms that can help you quickly browse providers and get cost estimates for medical services, helping you to make more informed decisions.

Utilize preventative care

Investing time in your health and engaging in preventative care can be a very effective way to avoid more serious and costly health issues later down the line. We live in society that is "on the go" or "a million miles a minute" where we simply do not have time due to demanding work flow. We have to make time to participate in things such as recommended annual health screenings to help you identify any potential issues. Work on staying fit and healthy before they become major issues. Focusing on maintaining a balanced diet, ensuring you get regular exercise, and avoiding harmful habits such as smoking or excessive drinking are also great forms of preventative care that you can do at home. Need help looking for balanced diet recipes? There are plenty of online cook books to help you find low calorie to low salt entrees.

Review your existing health insurance or obtain coverage

When was the last time you checked the specifics of your current health insurance plan? Taking the time to review your plan regularly and familiarizing yourself with what services are covered and the associated costs can help you avoid any costly surprises. You should also reassess your plan every year to ensure that it continues to meet your current healthcare needs.

If you have no coverage, think about the financial risks to your bank being unsured. We see countless Go Fund Me posts on Facebook and other Social Media platforms because of an unexpected injury or accident that took place. Not to mention news articles online of Patients who were stopped medical care in the hospital due to no coverage or even worse had to file for bankruptcy.

Compare your coverage with other potential plan opportunities

While the high cost of health insurance in the US is influenced by multiple systemic factors, patients can take actionable steps to mitigate their personal expenses. Regularly evaluating your coverage and exploring key factors such as premiums, deductibles, co-pays, and out-of-pocket maximums can help you find the right coverage that aligns with your healthcare needs and financial situation. Remember not all health plans are the same and will cover all medical care needs.