The real reason American health care is so expensive (2023)


Hint: single-payer won’t fix America’s health care spending.

Help us make more ambitious videos by joining the Vox Video Lab. It gets you exclusive perks, like livestream Q&As with all the Vox creators, a badge that levels up over time, and video extras bringing you closer to our work! Learn more at

Americans don't drive up the price by consuming more health care. They don't visit the doctor more than other developed countries:

But the price we pay for that visit - for a procedure - it costs way more:

The price you pay for the same procedure, at the same hospital, may vary enormously depending on what kind of health insurance you have in the US.

That's because of bargaining power. Government programs, like Medicare and Medicaid, can ask for a lower price from health service providers because they have the numbers: the hospital has to comply or else risk losing the business of millions of Americans.

There are dozens of private health insurance providers in the United States and they each need to bargain for prices with hospitals and doctors. The numbers of people private insurances represent are much less than the government programs. That means a higher price when you go to the doctor or fill a prescription.

Uninsured individuals have the least bargaining power. Without any insurance, you will pay the highest price.

For more health care policy content, check out The Impact, a podcast about the human consequences of policy-making. is a news website that helps you cut through the noise and understand what's really driving the events in the headlines. Check out to get up to speed on everything from Kurdistan to the Kim Kardashian app.

Check out our full video catalog:
Follow Vox on Twitter:
Or on Facebook:


I cannot tell you how obsessed I am with this chart.

It shows exactly what is wrong with America's conversation about health care on one level.

You've seen this chart before it shows health care spending as a share of the economy of a bunch of countries, there's Germany and France and Japan Canada and oh, there's America.

But not want to add something you haven't seen to this chart.

This is how much of that spending in each country is private.

And how much is public here's, what's, amazing America's, government spending on health care on programs like Medicaid and Medicare.

And the VA, our versions of socialized medicine it's about the same size as these other countries.

These countries where the government runs the whole health care system and then there's our private spending it's, the private insurance system that makes health care in America.

So expensive conventional wisdom says, the government is more expensive than the private sector.

It can't say, no, it's, corrupt its inefficient it's slow.

If you want something done, right, you give it to the private sector that is what we hear in America all the time.

And yet here we are with the biggest private sector spending the most.

Why is a free-market so bad by controlling the cost of health care in the United States? If you look at the data on physician visits and hospital discharges, you can get rid of one theory, Americans, don't consume more health care than people in these other countries.

We don't go to the doctor more than the Germans or the Japanese.

In fact, we go to the doctor less.

The difference between us and them is it.

We pay every time we go to the doctor for everything from an angioplasty to a hip replacement from a c-section to a pain reliever in America.

The price grew same procedure at the same hospital.

It varies enormous lis, depending on who is footing the bill the price for someone with public insurance like Medicare or Medicaid is often the lowest price these groups.

He covers so many people that the government can demand lower prices from hospitals and doctors, and they get those lower prices.

If the doctors in hospitals say, you know, there was a ton of business.

They lose all those people on Medicare.

All those people on Medicaid, but there are hundreds of private insurance companies, and they each cover far fewer people than a Medicare or Medicaid.

And each one has to negotiate prices and hospitals and doctors on their own.

And if you're uninsured, you have you been less levered.

Nobody is indigo.

She your behalf.

So you end up paying the highest price.

One study found that most hospitals charge uninsured patients, four times as much as Medicare patients for an ER visit other countries.

They don't have this problem.

Instead of every private insurance company negotiating with every healthcare provider, there's, just this big list country.

The central government they go.

And they say, if you want to sell to us to all of our people then here's, what you can charge for a checkup here's, what you can charge for an MRI or a prescription for lipitor.

And so then whether that bill goes to the heavily regulated, private insurance companies in Germany or directly to the government like in the UK.

Each country is telling the doctor or hospital or drug company how much that bill will be.

And because the government controls access to all of the customers it's, an offer that hospitals and doctors and pharmaceutical companies, typically can't refuse in America.

The idea is that you'll be a consumer you'll deal.

What you do when you go to Best Buy and buy a television, but that just doesn't work in healthcare, doesn't work in healthcare, because you often come and get health care when you're unconscious in an ambulance when you're scared when it's for your spouse or your child.

It is a time when you have the least bargaining power.

You are not usually capable of saying, no you're, not knowledgeable enough to do it you're, not comfortable doing it or you're.

Not conscious enough to do it that's.

Why? In other countries, the government is a person who can say, no for you, you can say, no, that's, too expensive, you're gonna have to lower your price, because they do have that power a new push for single-payer health care right here in the US California and others are saying, maybe we should adopt the European model if we decided to create a single-payer system with one of these huge prices in the US, there'd be nothing to stop lobbying from hospitals from doctors from drug companies.

And those prices would get influenced.

So we could end up with a single-payer system that is expensive even as expensive as our current system.

It all depends on how much you negotiate down the prices.

And now in America, these groups have so much power because they are so rich, but it's really hard to get them to bring down the prices.

This is the irony of American healthcare, it's so expensive that it's become hard to make it cheaper.

All that money they make that becomes political power and years and years and years of overpaying.

Those are huge industries now.

And they have a lot of influence in Congress under a single-payer system.

If we did drive prices down, doctors and hospitals, they would be paid less in there right now that might mean some of them closed or some go out of business or some move.

It would be really painful.

One person's waste is another person's essential service or local hospital or their income, but then single payer it's, not an all-or-nothing choice.

For instance, if there's a really interesting section of Bernie Sanders Medicare for all bill where he lays out this interim plan it's a plan.

He wants why setting up his new single-payer system.

And in that plan, he expands Medicare to cover vision and dental.

And he opens it to nearly everyone, not just people 65 and older all kids go on Medicare automatically and most adults can buy in that plan on its own.

It wouldn't get American health care spending far down overnight, but it would at least begin to recognize what we already know.

And what most of other countries already do that health care is one of those things, the government can do cheaper and better than the private sector.


Why is the American healthcare system so expensive? ›

There are many possible reasons for that increase in healthcare prices: The introduction of new, innovative healthcare technology can lead to better, more expensive procedures and products. The complexity of the U.S. healthcare system can lead to administrative waste in the insurance and provider payment systems.

What is a major reason American healthcare costs are so high compared to other countries? ›

Despite spending nearly twice as much on healthcare per capita, utilization rates in the United States do not differ significantly from other wealthy OECD countries. Prices, therefore, appear to be the main driver of the cost difference between the United States and other wealthy countries.

Why do you think the American health care system costs more than the systems in place in most advanced Western democracies? ›

Why Is the United States Spending More on Healthcare? Healthcare spending is driven by utilization (the number of services used) and price (the amount charged per service). An increase in either of those factors can result in higher healthcare costs.

Why healthcare should be cheaper in the US? ›

U.S. health care spending is unsustainable.

Rising health care costs both contribute to our federal deficit and reduce our ability to spend in other important areas, including education, housing, and economic development.

Is the US healthcare system the most expensive in the world? ›

As our chart illustrates, U.S. per-capita healthcare spending (including public and private as well as compulsory and voluntary spending) is higher than anywhere else in the world, with second-placed Germany trailing quite far behind. On average, healthcare costs in the U.S. amounted up to $12,318 per person in 2021.

Why is everything so expensive in America? ›

Why is inflation so high? Inflation is so high because many consumers are spending more money than they usually do, and because supply chain issues and global fuel shortages have lingered since the pandemic. That high demand and low supply have led to an increase in prices.

Why is the US healthcare system so inefficient? ›

Due to the shortage of nurses, physicians, and specialists in hospitals and health centers, among other rising challenges in public health care, Americans are unable to get the optimal quality of medical care they require. The U.S. stands out from many countries in not offering universal health insurance coverage.

Why is healthcare so cheap in other countries? ›

Taxes are lower. Food costs less. And salaries are lower. Foreign doctors often make a sixth of the salary of their U.S. counterparts.

Which country has the highest healthcare costs? ›

Health Expenditure in the U.S.

The United States is the highest spending country worldwide when it comes to health care.

Why is expensive healthcare a problem? ›

High costs inflate the earnings of many providers and make the industry unnecessarily large. The cost of employer-provided health insurance, largely invisible to employees, not only holds down wages but also destroys jobs, especially for less skilled workers, and replaces good jobs with worse jobs at lower wages.

What factors are affecting health care costs in the United States? ›

Why Are Healthcare Costs Rising?
  • Service price and intensity.
  • Population growth.
  • Population aging.
  • Disease prevalence or incidence.
  • Medical service utilization.

What are three ways to reduce health care costs? ›

Try the tips below to help you get the most from your benefits and save money on your care.
  1. Save Money on Medicines. ...
  2. Use Your Benefits. ...
  3. Plan Ahead for Urgent and Emergency Care. ...
  4. Ask About Outpatient Facilities. ...
  5. Choose In-Network Health Care Providers. ...
  6. Take Care of Your Health. ...
  7. Choose a Health Plan That is Right for You.
Aug 11, 2022

Does the US spend the least on healthcare? ›

Health Care Use

While U.S. health care spending is the highest in the world, Americans overall visit physicians less frequently than residents of most other high-income countries. At four visits per person per year, Americans see the doctor less often than the OECD average.

Is healthcare quality better in the US? ›

Key Findings: The top-performing countries overall are Norway, the Netherlands, and Australia. The United States ranks last overall, despite spending far more of its gross domestic product on health care.

What is the most expensive health care in the US? ›

The Most Expensive States For Health Care, Ranked Highest to Lowest
RankStateHealth Care Spending Per Capita¹
1South Dakota$11,736
3West Virginia$12,019
6 more rows
Nov 8, 2022

How can America lower healthcare costs? ›

Another solution is Congress setting an inflation index for health insurance cost variations where costs are tied to local market conditions. The Peterson Center on Healthcare has an initiative for a similar state-centric approach to reduce health costs: establishing cost growth targets through commissions.

Is US healthcare really the best? ›

Key Findings: The top-performing countries overall are Norway, the Netherlands, and Australia. The United States ranks last overall, despite spending far more of its gross domestic product on health care.

Who has free healthcare in the world? ›

However, Brazil is the only country in the world that offers free healthcare for all its citizens. Also, Norway is the first country in the world to implement a free healthcare policy as far back as 1912.

Top Articles
Latest Posts
Article information

Author: Jonah Leffler

Last Updated: 14/01/2024

Views: 5475

Rating: 4.4 / 5 (45 voted)

Reviews: 92% of readers found this page helpful

Author information

Name: Jonah Leffler

Birthday: 1997-10-27

Address: 8987 Kieth Ports, Luettgenland, CT 54657-9808

Phone: +2611128251586

Job: Mining Supervisor

Hobby: Worldbuilding, Electronics, Amateur radio, Skiing, Cycling, Jogging, Taxidermy

Introduction: My name is Jonah Leffler, I am a determined, faithful, outstanding, inexpensive, cheerful, determined, smiling person who loves writing and wants to share my knowledge and understanding with you.