Healthcare Costs in the U.S.

Daniela Hrizo, 4/25/24

“Every single one of us deserves access to quality, affordable healthcare.” 

-Sara Gideon, former Maine State Representative (2012-2020)

It is well understood that everyone needs healthcare. Whether it's to treat an infection, go to physical therapy, monitor chronic diseases, or just go to regular check-ups, the people of the US need the healthcare system. However, healthcare costs have been rising over the last couple of decades, and it has earned the US a reputation. “The United States has one of the highest costs of healthcare in the world,” the Peter G. Foundation mentions. “In 2022, U.S. healthcare spending reached $4.5 trillion, which averages to $13,493 per person. By comparison, the average cost of healthcare per person in other wealthy countries is less than half as much.”

Why?

Healthcare is becoming more and more expensive in the US, but why? There are several factors: frequency of chronic illnesses, increasing drug prices, physician salaries, and more.

First of all, according to the CDC, “Six out of every 10 adults in the United States have a chronic disease.” Overall, patients with chronic diseases become more complex cases and require more research. This costs a lot of money for the country. “When including indirect costs associated with lost economic productivity, the total cost of chronic disease in the United States reaches $3.7 trillion each year, approximately 19.6 percent of the country’s gross domestic product,” states the American Action Forum. Therefore, this causes an increase in healthcare costs to make up for the nation’s expenses.

Next, drug prices have been rising, which takes a big part in healthcare costs. According to Health System Tracker, “In 2019 (the latest year with internationally comparable data from the OECD), the U.S. spent $1,126 per capita on prescribed medicines, while comparable countries spent $552 on average. This includes spending from insurers and out-of-pocket costs from patients for prescription drugs filled at the pharmacy. Per capita prescribed medicine spending in the U.S. grew by 69% from 2004 to 2019, compared to 41% in comparable countries, on average.” This shows that there has been a consistent increase in drug costs, and the US continues to surpass other developed countries, having double the amount spent on prescribed medicines. This is partly due to the creation of advanced medicines with very specialized uses. The newer or more complex medications tend to be very expensive. These can be used to treat cancers, autoimmune diseases, and more. On top of this, there aren’t many restrictions or laws preventing drug manufacturers from inflating their prices. Drug prices as a whole take up a large part of healthcare costs and further contribute to the United States’s reputation of unaffordable healthcare.

Finally, physicians are paid substantially more in the United States compared to other developed countries. JAMA Network explains, “Salaries of physicians and nurses were higher in the US; for example, generalist physicians salaries were $218,173 in the US compared with a range of $86,607 to $154,126 in the other countries.” This means that high healthcare costs correlate to high physician salaries. Healthcare costs must be kept high to fund the salaries of physicians and other workers in the medical field.

Impact on Americans

The large expenses for healthcare affect Americans. In a study done by KFF, the following has been concluded:

• About half of U.S. adults say it is difficult to afford health care costs, and one in four say they or a family member in their household had problems paying for health care in the past 12 months.

• The cost of health care can lead some to put off needed care.

• The cost of prescription drugs prevents some people from filling prescriptions.

• Those who are covered by health insurance are not immune to the burden of health care costs.

• Healthcare debt is a burden for a large share of Americans.

• Notable shares of adults still say they are worried about affording medical costs such as unexpected bills, the cost of healthcare services (including out-of-pocket costs not covered by insurance, such as co-pays and deductibles), prescription drug costs, and long-term care services for themselves or a family member.

Healthcare costs are disturbingly high and steadily increasing in the US. On top of that, the US is keeping up a reputation for this as other developed countries aren’t experiencing nearly this much of an inflation. There are several reasons for this phenomenon. High healthcare costs in the United States are largely due to the common occurrence of chronic disease around the country, unrealistically high drug prices (from inflation and advancements in technology), and the already high salaries of workers in medicine that need to be paid for. The inflation of healthcare costs is negatively impacting US citizens and is becoming a common financial burden.