Americans Use Less Health Care, Pay More

Americans Use Less Health Care, Pay More

Americans Use Less Health Care, Pay More

It is widely known that health care is far more expensive in the United States than in other developed nations. Several factors have been blamed for this predicament.

Many conservatives think that medical malpractice lawsuits have driven up costs by forcing doctors to perform so-called "defensive medicine"--unnecessary tests and procedures in order to cover them in the case of lawsuits. Others, mostly progressives, blame the fact that a significant percentage of Americans are uninsured, and therefore relying on more costly acute emergency treatment instead of primary care.

Either way, Americans' overuse of health care services are presented as the scapegoat. However, this may not be true. A new report from the Washington Post shows that the U.S. actually uses fewer health care services (determined by the number of doctor and hospital visits) than Western European nations and other developed countries with similar economies. Instead, the main reason appears to be rising unit prices. In other words, each individual treatment is more expensive in the United States.

Jordan Rau of Kaiser Health News recently wrote an article for an NPR (National Public Radio) blog about this phenomenon. According to Rau, the consolidation of hospitals into several large chains is a major factor. In some markets, there is virtually no competition in the healthcare industry. Therefore, that monopoly allows them to raise prices as much as the market will bear.

The Washington Post uses information from a decade ago. Health care inflation has increased even further since 2000. That causes the price of health insurance plans to go up, since insurers must cover these treatments. That affects not only monthly premiums, but the higher co-payments and co-insurance percentages that policyholders must pay.

Does using less, more costly health care help Americans reach better health outcomes? The U.S. seems to have superior survival rates for cancer. Still, for the most part, health outcomes do not seem to be improved with the higher spending levels.

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