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Key Takeaways

US Cost of Healthcare

  • The US spends more per person on healthcare than other wealthy countries but trails behind them in key health indicators like lower life expectancy.
  • Access to healthcare in the US is limited by high cost, lack of insurance coverage, and a shortage of healthcare providers.
  • Efforts to resolve these problems are deeply polarizing and typically provoke powerful industry interests that stand in the way of expanding access.
  • The complex marketplace for healthcare services doesn’t always incentivize better care for more people.


The US is the wealthiest country in the world but it trails behind other wealthy countries in key health indicators, like life expectancy. Over the last four decades, life expectancy in the US has risen significantly more slowly than in other high-income countries, and in recent years, it has virtually stopped rising.

Yet, we spent $10,966 per person on healthcare in 2019, nearly twice the average of comparable countries.

At the same time, many Americans lack access to affordable healthcare. 80% of rural patients live in counties labeled by the federal government as “medically underserved.” Tens of millions are uninsured; tens of millions more are underinsured and can’t afford out-of-pocket medical costs.

Why is it that we spend so much on healthcare when so many of us lack reasonable access? A primary reason is that the American healthcare system is a complex hodge-podge of government insurance, private insurance, and government-owned institutions (such as the Veterans Administration). Or, as healthcare policy expert Simon F. Haeder called it, a “patchwork that nobody likes.”

Our convoluted system doesn’t limit access per se. Rather, it often creates perverse incentives for actors within the system to limit access. Hospitals that don’t turn a profit are closed, sometimes leaving neighboring communities without vital resources in direct contradiction to the “do no harm” ethic that is a driver of medical practice. Hospitals and pharmaceutical companies charge what insurance companies will pay, not what patients can afford. The complex requirements of the private insurance industry place an administrative burden on healthcare providers, inflating overall costs to a point that threatens the financial health of many patients.

This state of affairs stands, once again, in marked contrast to other wealthy countries. Every modern industrialized country except the United States has come to treat healthcare as a right guaranteed by the government. These nations deliver universal healthcare to their citizens through a variety of methods, from government-owned healthcare facilities to highly regulated compulsory insurance. The UK, for instance, provides fully-nationalized, free-at-point-of-use healthcare for everyone.

The US has failed to fully embrace the view of healthcare as a right for several reasons: hyperpartisan politics, industry interests, and a lack of immediate contact with the healthcare system. The result has been a lack of commitment to healthcare reform.

The most recent comprehensive effort at reform was the Patient Protection and Affordable Care Act of 2010 (ACA, also known as the Affordable Care Act and Obamacare). Its main goals were to expand health insurance coverage to more consumers, provide more consumer protection, improve the quality of care, and control costs.

In 2009, 4,525 lobbyists — eight for each member of Congress — worked to influence health reform bills. Ultimately, the ACA passed without a single Republican vote. In the decade after its passage, the number of insured Americans increased, but so did cost.

More recently, the COVID-19 crisis further stressed a struggling system. But it also revealed opportunities as, for example, more Americans than ever are receiving care via online video calls, a form of medical practice known as telehealth.

As costs continue to rise and hospitals continue to close, we will need to address these barriers to healthcare access.

Related Problems: National Debt, Income & Wealth Inequality

Contributors: Eric Seaborg, Ciara McLarenGeorge Linzer

Review: Pending

Published: May 27, 2021

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