Why is Healthcare in America so Expensive?
written by Isai L.
February 22, 2021
This may be obvious, but healthcare in America is expensive. To able to explain why that is, we must start from how it became like this.
Before government programs like Medicare and Medicaid, Blue Cross and Blue Shield were the main providers of health insurance in the United States. At the time they were nonprofit and accepted anyone who wanted to sign up. According to PolitiFact and Griffin Benefits, after WW2, U.S employers started offering health insurance. Suddenly demand for insurance skyrocketed. For example, from 1940-1950 Americans with health insurance went from less than 10% to over 50%.
That demand created a business opportunity. For-profit companies started to get into insurance. By 1951, Aetna and Cigna were both major players in the health insurance market, and by 1965, President Lyndon B. Johnson established Medicare and Medicaid.
Even that could not stop the momentum that the for-profit insurance market, which grew in the 1970’s and the 1980’s, capturing more of the health insurance market. Meanwhile the first for-profit hospitals started popping up around the country. When Medicare and Medicaid started there were none, but now in 2021, we have over 6,000 for-profit hospitals. But that number can change by how organizations classify each hospital type and over 1,200 are investor owned (according to The American Hospital Association). Hospitals started to realize that they can really charge whatever they want because nobody else could do what they do.
Hospitals went from something known as philanthropy to a corporation. But these corporations are not just selling another day-to-day item like headphones, they are putting a price on human health. You would think that if hospitals are becoming more efficient, the costs should go down too, but that is not the case. A lot of that is due to the billing system. Doctors need to get paid, need medical supplies, and technology. Instead of a simple bill with a couple of pages that is simple to understand, it could seem like you would be given an entire book.
Now why are these medical bills so long? According to the Associated Press at The Daily News, this is known as unbundling and this is a similar process to buying a plane ticket. You buy the ticket itself for $200 but there is a lot more you would have to pay for like $30 for a checked bag, $50 for a few extra inches of leg room, $3 for a cup of water... you get the idea. Hospitals do this through a complex system of code; different codes mean different prices. For example, a rib fracture is known as code S224 and an unspecified fracture of unspecified wrist and hand is code S62.90XA. Some doctors also say that they are worried they would get sued due to malpractice lawsuits, so they order more tests to protect themselves. Bills are getting longer but health outcomes are not getting better.
Another reason people are paying so much is because drugs like Colchicine are under control of just one company and they put their prices a lot higher to make more money. They can get away with this type of stuff because there is nobody to stop them. These drugs are also becoming more expensive due to our government raising the price on these prescribed drugs and people would still buy it because they need the drug to get better.
All the people that I have asked about this topic have all agreed this is a big problem for us. That is because the cost of health insurance is a big problem in the United States.
For example, Mr. Cazier had an experience where he took his granddaughter to Casper, Wyoming. His daughter left her window open and at some point, in the night a bat flew in the room. Mr. Cazier was trying to get the bat out the window but failed so he left the window open to simply let the bat out on its own. They went back to Colorado the next day and they were not sure if the bat had bit his granddaughter. To make sure, they had to get multiple rabies shots. They were not cheap because each one was two thousand dollars. The bill came out to be over ten thousand dollars. Imagine that you had to pay ten thousand dollars for some rabies shots.
In conclusion the main reason that Healthcare is so expensive in America is because of the for-profit insurance company's greed that led to the series of events that have brought us expensive bills that we cannot really do anything about.