The US health care rip off

According to a new report from the Johns Hopkins Bloomberg School of Public Health says that the annual per capita expenditure on health care in the US is $9,892, almost two and a half times the average spent by OECD countries which is $4,033. It is well known that the health outcomes in the US are well below those of those countries so we are spending a whole lot more and getting a whole lot less.

The report says that the increased cost is not because people are getting more medical services but that in the US “drugs cost more, doctors and nurses are paid better, hospital administration is more expensive and many medical services have higher price tags.”

One reason for the jump in spending increase is the widening gap between what the federal government reimburses for Medicare and what private insurers and employers pay for those with job-based coverage, Anderson said. In 2000, the difference was roughly 10%. Now, studies have shown it has widened to 50% or more.

Anderson attributes this to consolidation among hospitals and doctors’ practices, which allows them to demand higher prices.

Despite paying higher prices, Americans actually have less access to doctors, nurses and hospital beds. There are only 2.6 practicing doctors per 1,000 people in the US, compared to a median of 3.2 active physicians in the OECD, for instance.

“It’s not that we’re getting more. It’s that we’re paying much more,” Anderson said.

This report will add to the pressure for getting rid of the existing wasteful and inefficient system and replacing it with universal health care of some kind, the easiest being Medicare for All.


  1. Jean says

    But the private sector is so much more efficient. So how is that possible? Could there be a flaw in this premise?

  2. Some Old Programmer says

    Uh, that list of why US health care is more expensive has a glaring omission; the entire health insurance industry is deadweight when compared to modern single payer healthcare delivery.

  3. says

    @Some Old Programmer:

    Nah. Admin costs for Medicare are around 1.4%, though that’s in part because they save a little money by sharing databases and a small amount of infrastructure costs with Social security and a couple other government programs. Total administrative costs might be around 2%. Overhead on individual plans can approach 20% (it would be higher, but the law forbids it), but on large group plans it’s about 12%, medium groups is 15% or so.

    If we gave all the uninsured large or medium group plans and grouped the people buying on the individual market, then only 85% of the insurance industry would be dead weight.

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