The real reason American health care is so expensive

Summary

This video critiques America's healthcare spending, highlighting how government programs like Medicare and Medicaid spend about the same as fully public systems in other countries. However, private sector costs in the U.S. inflate overall expenses, leading to higher prices for medical procedures, regardless of service consumption. The video argues that healthcare isn't like other consumer services, where competition drives costs down. It advocates for a single-payer system that could potentially lower prices, though entrenched interests make reform difficult due to political and economic power.

Takeaways

• 📊 America's health care spending, especially in the private sector, is significantly higher than other developed countries.
• 💡 The U.S. government spends about the same amount on public health care (Medicare, Medicaid, VA) as other countries with fully public systems.
• 💰 It's the private insurance sector in the U.S. that leads to higher overall health care costs.
• 🚫 Conventional wisdom that private sector is more efficient than government doesn't hold true in health care, as private insurance makes U.S. health care expensive.
• 🔍 Americans do not consume more health care than people in other countries, but they pay much higher prices for the same services.
• 🏥 Prices in U.S. health care vary greatly depending on who is paying the bill—public insurance like Medicare often gets the lowest rates.
• 🤝 Other countries have centralized systems where the government negotiates fixed prices for health services, controlling costs.
• 📉 The fragmented private insurance market in the U.S. weakens its bargaining power, leading to higher prices, especially for uninsured patients.
• 💼 The U.S. health care system doesn't allow consumers to make choices like in retail, as people often seek health care during emergencies or when they lack knowledge or bargaining power.
• ⚖️ Moving to a single-payer system in the U.S. could potentially lower prices, but powerful medical and pharmaceutical lobbies may resist, keeping costs high.

Q & A

What does the chart in the script illustrate about health care spending in America compared to other countries?

The chart shows that America's government spending on health care, through programs like Medicare and Medicaid, is comparable to other countries where the government runs the entire health care system. However, America also has a much higher private sector spending, which significantly drives up overall health care costs.

Why is private health care spending in the U.S. so high compared to other countries?

Private spending in the U.S. is high because private insurance companies cover fewer people than government programs like Medicare, leading to higher prices. Additionally, uninsured individuals face the highest costs, as they lack negotiating power.

Is the high cost of health care in the U.S. due to Americans consuming more health care services?

No, the script notes that Americans do not use more health care services than people in other countries like Germany or Japan. The difference is that Americans pay more for the same services, procedures, and treatments.

How do Medicare and Medicaid manage to secure lower prices for health care services?

Medicare and Medicaid cover a large number of people, giving the government significant leverage to demand lower prices from hospitals and doctors. Providers cannot afford to lose all the patients covered by these programs, so they agree to lower rates.

What is the problem with private insurance companies negotiating prices individually?

Private insurance companies each cover fewer people than government programs, and they negotiate prices individually with hospitals and doctors. This fragmentation weakens their bargaining power, leading to higher prices for procedures and treatments.

Why do uninsured individuals pay the highest prices for health care services?

Uninsured individuals have no negotiating power, so they are often charged the highest prices for health care services—sometimes up to four times more than what Medicare pays for the same service.

How do other countries avoid the issue of fragmented price negotiation in health care?

In other countries, the government often sets a centralized price list for health care services. Whether the bill goes to private insurance companies or directly to the government, there is a set price for each service, ensuring consistent and lower costs.

Why is it difficult to lower health care costs in the U.S. even if a single-payer system is adopted?

Lobbying by hospitals, doctors, and drug companies makes it difficult to lower prices in a single-payer system. These groups are very powerful and wealthy, making it challenging to drive down costs through negotiation.

What is the political challenge of implementing a single-payer system in the U.S.?

The U.S. health care industry is a huge economic sector with significant political influence. Reducing prices would affect incomes and lead to resistance from hospitals, doctors, and pharmaceutical companies, many of whom have strong lobbies in Congress.

What is Bernie Sanders' interim plan for health care reform before a full single-payer system is established?

Bernie Sanders' interim plan proposes expanding Medicare to cover vision and dental services and allowing nearly everyone, including children, to access Medicare. This would begin to lower health care costs gradually without fully transitioning to a single-payer system overnight.