This seems extremely high.. Ireland with free public healthcare for example is ~6%.. I think the largest in Europe, by a lot, is Germany? ~13%.
1. Doctors, nurses, and hospital admins make dramatically, *dramatically* more money in the US than anywhere except Switzerland. Every time a discussion of healthcare costs comes up, everyone tries to point their fingers at middlemen, but the middlemen extract tiny fractions of the revenue stream. Most of it goes to actual humans that are high status, and no one wants to imply they’re lobbying to lower the pay of these folks
2. The US pays for drug development for the entire world. You can call this the US “overpaying”, or the rest of the world “free-loading”, but the US is a very rich country that has decided to incentivize drug development by allowing drug companies to profit from their massive investments by setting high prices
3. Americans are fatter than the rest of the rich world (although the rest of the rich world is rapidly catching up) and chronic metabolic-disease is very expensive to treat (everywhere)
We could trade reduced innovation for lower prices, but that's a difficult ethical debate to settle given the prevalence of medical suffering from lack of effective therapies.
The solution I personally petition for is looking for ways to make drug development more affordable across the board.
Where are all the anti-taxes people on this apparent involuntary charity for the pharmaceutical industry?
It's not free, but it's shockingly less expensive, and there are cheaper countries in the EU than Austria.
https://thedailyeconomy.org/article/how-congress-created-the...
Respectfully, my perception contradicts this. My GF has been a psychologist for 25 years. For the first half of her career, funding for her work was provided exclusively by a state program (California), but about 10 years ago, the funding transitioned mostly to private health insurance. And it's been a bureaucratic nightmare every since. She had to hire a skilled/well-paid FTE just to manage the billing with the private health insurance companies. And it's still a nightmare to deal with. So yeah, to downplay the "bureaucratic overhead" of private insurance, is not universally accurate, IMHO. Maybe for big hospitals, it represents a small percentage of overheard, but not for smaller providers.
> There are no official data on their total size, but estimates extrapolated from micro-costing studies suggest that billing and insurance-related services alone comprise about 15 percent of health care spending, and total administrative costs may comprise about 30 percent.
1. https://econofact.org/how-large-a-burden-are-administrative-...?
I’d only extend that point 2 is true for many cutting-edge treatments beyond simply drug development & is tied to point 1: If you pay doctors top-flight salaries, you get a lot of smart, innovative doctors pushing (at great cost) into the future of medicine.
Similar story with admins working to make care more efficient and also humane, data science teams (yes, big research and academic hospitals have these in spades!) …
America is rich and wants to spend that on medicine. It’s not a conspiracy of oligarchs.
Insurance companies spend a maximum of 80-85% of collected premiums on healthcare, and only because this is regulated by law, otherwise it would be even less.
On the other side hospitals, clinics and private practitioners all have dedicated departments and staff whose only job is to deal with billing and negotiations with insurance providers. That also costs a hell of a lot more than a couple percent.
So just adding up these two there's 15-30% of medical expenditure that isn't going towards actual care, just overhead. Recover this cost and the US will immediately fall in line with how much the rest of the developed world spends on healthcare, even with the high doctors salaries and drug costs.
Health providing shouldn't be a for-profit endeavor. Certainly shouldn't be in the stock market and it absolutely shouldn't be comingled with "insurance"
What keeps me from bringing my business too the competition like I do in every other market? The main constraint I see right now is that there are very few, but large hospitals and my insurance only pays for me to go to even fewer of those. However, competition already works (if the patient makes an effort) for some planned procedures like CT scans where you can safe up to 80% in my own experience.
Much of this is heavily subsidized by insurance. Any drastic change in the status quo would inevitably cause pricing and coverage that people are used to be adjusted, which is why they say they want healthcare reform until it actually happens.
US public healthcare expenditures are similar to what some developed countries with fully public universal healthcare have—and the private expenditures on top are more than the public costs.
People sometimes joke about the US having gaps in healthcare because of defense or other spending, but the fact is the US effectively pays vast amounts of money to create those gaps, rather than having them because of some resource constraints.
There are still people trying to behave ethically within this framework, but it's hard when the framework itself is so corrupted by profit motives which should never have been there in the first place. Direct providers should be running the show, not financiers. They need to be aware of how to balance the books within reason and be paid properly, but beyond that it should be much more patient focused. We definitely don't need so many profit-taking leeches in all the places we have them now.
Is this a product of inflated prices ? Or is this research funding for example ? I'm curious what the complete definition for Healthcare spending actually is.
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
$965B is Medicare - healthcare for old people
$885B is Health (aka Medicaid) - healthcare for poor people
$360B Veterans Benefits and Services - at least half of this is healthcare for active and retired military (subset of federal government employees)
The healthcare for non military federal government employees is not included in the above amounts, nor is the state government and lower government level spending on healthcare for employees.
Combine the above numbers with $1.45T in Social Security (cash given to old people), and all other US federal government expenses pale in comparison to wealth transfers to old and sick people.