Why is healthcare so absurdly expensive in the US? Also why is the process of specialist consultation so ridiculously convoluted?

Answer by Marcia Peterson Buckie:

There are a lot of factors:

1) Prescription medications :  US antitrust laws prohibit the government from controlling the price of medications. For expensive medications, I've  gone 30 minutes to Windsor and gotten medications for 50 percent less. ( my husband is a pharmacist and has easy access to price comparisons)

A lot of marketing also adds to the price of medications, though legislation and hospital policy are now limiting the amount of advertising, gifts and sponsors of conferences


It's interesting, my husband is a pharmacist in the U.S.  Pharmaceutical companies rarely hire pharmacists as drug reps in the US , and part of it is their license requires them to adhere to a code of ethics that may not be of benefit to the pharmaceutical company . Whereas, his grandfather was a pharmacist ( chemist) in the UK and worked as a rep for ICI for many years.

2)  "treating insurance, instead of the patient" often people with good insurance have borderline unnecessary or definitely unnecessary procedures and services recommended or billed to them. When I went from a job where I had a lot of high acuity rehab patients who were underinsured or uninsured and I had to limit what I could provide despite obvious need.. Then I went to a hospital with a more " desirable payor mix" I
…I  was often pressured by my supervisors to keep people on my caseload ths to didn't think needed the survives because " their insurance covered it.

Oncologist Otis Brawley , M.D.  Covers the practice of over treating cancer patients in his book "How we do harm"

3) increased life spans.. On the neonatal units and in nursing homes. The increase in micro preemies has resulted in an increase in children with lifelong medical needs that are costly. ( I'm not arguing against this, but it's a factor we cannot ignore)  The average lifespan has increased signicantly. Whether it's Medicare, Medicaid, Or private insurance , all of these things get passed on in costs whether to tax payors, or private insurance policy holders.

NICU stays run between 3, 000 to 10, 000 dollars a day ( mechanical ventilator increases the cost )


4) treating healthcare as a business versus approaching it as a public good / service with a scientific, evidence driven

5) not all medical technological advances and inventions are good. Sometimes a slick sales job means a new piece of equipment gets approved, and then it gets used more than it might have, if at all. 

The expectation that you should never wait for non -emergent imaging like MRIs means there are more MRIs, and that means more facilities have to pass on the cost of competing with the hospital down the street who has an MRI, or a DaVinci surgery robot etc gets passed on to the consumers of healthcare and third party payors.

6) healthcare is expensive because the bread and butter at the core of  healthcare can't be replaced by machines or technology.  The biggest percentage of healthcare costs are human beings. From nursing assistants, housekeepers, transporters, nurses, therapists, physicians of various specialties

They require salaries, and are attracted to benefits such as paid time off and health insurance.  There is an anticipate critical shortage of nursing assistant, which is a demanding, historically low paying job ( about $ 10-12 an hour) and high turnover means costs.

You cannot overwork pharmacists, nurses, doctors etc without it leading to burnout , stress, mistakes , turn over , etc.   Turnover, employee injuries, and mistakes cost  money.  But often administrators are penny wise and pound foolish. Short term balancing of budgets doesn't negate the truth of the axiom : quality is cost effective.

7) lack of communicaton between private facilities means duplication of services and procedures . The Meaningful Use intiative is addressing that , but implementation of the technology is costly.


8)  A ( sometimes) more educated patient/ family population. The internet means there are patient communities and resources that patients research when they have a healthcare issue.  But sometimes people don't have good information, we all know how much bad science is out there. So patients/ parents demand and advocate for things that aren't effective, or are even harmful.

Over prescription of antibiotics and the vaccine issue are examples.

Antibiotic overuse costs US billions

( Patients often make demands to physicians for antibiotic prescriptions for things that will get better with time. It's also in our industrial meat supply .  Among other factors, it's lead to the development increase in life threatening super bugs that are antibiotic resistant)

9) Difficulty  accessing and  paying for mental health insurance. There is an entire body of medical research has long established that when mental health issues are properly addressed physical/ medical health is likely to be better. But we are in an era of high worker productivity, lower quality of life, the lowest amount of time off in the western world, and a pattern of insurance companies and even members of the medical community minimizing the importance of mental health services.

an improvement: the mental health parity act: require insurance carriers to  treat mental health/ psychiatric outpatient services the same as office visits to a primary care physicians.



10. The economic implications of resistance to contraceptive coverage and subsidizing is quite compelling.



From the NYT blog :

The recent controversy over contraception and health insurance has focused on who should pay for the pill. But there is a wealth of economic evidence about the value of the pill – to taxpayers, as my colleague Motoko Rich writes, as well as to women in general.
Indeed, as the economist Betsey Stevenson has noted, a number of studies have shown that by allowing women to delay marriage and childbearing, the pill has also helped them invest in their skills and education, join the work force in greater numbers, move into higher-status and better-paying professions and make more money over all.
One of the most influential and frequently cited studies of the impact the pill has had on women’s lives comes from Claudia Goldin and Lawrence F. Katz. The two Harvard economists argue that the pill gave women “far greater certainty regarding the pregnancy consequences of sex.” That “lowered the costs of engaging in long-term career investments,” freeing women to finish high school or go to college, for instance, rather than settling down.


The point here is simple. While birth control costs more than nothing, it costs less than an abortion and much less than having a baby. From a social point of view, unless we're not going to subsidize consumption of health care services at all (which would be a really drastic change from the status quo) then it makes a ton of sense to heavily subsidize contraceptives. Now of course sometimes the economically rational course of action (kill everyone in Alberta and steal their oil) is immoral (killing is wrong) and therefore we don't do it. But just on the dollars and cents subsidizing birth control is a no-brainer. The unfortunate thing is that under the American setup the subsidiestend to be passed through the employer, which has set the stage for this controversy.

I think the ACA mandate was one of the soundest economic policies in there. But the ability of employers being able to get exemptions means that insurance attached to employment is not a feasible way to implement subsidized birth control

Then there is the fact that a large percentage of women who use the IUDs and oral contraceptives use them to treat medical conditions.


Why is healthcare so absurdly expensive in the US? Also why is the process of specialist consultation so ridiculously convoluted?