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Introduction
The US is a country where healthcare spending is several times higher than in other countries with comparable income levels. In particular, costs in the healthcare industry have been increasing at a much faster rate than the rate of inflation in general. Equally important, the role of the federal government in health care delivery and financing in the United States is excessive, since a huge part of the costs is associated with various bureaucratic procedures related to the financing and implementation of various programs. This paper aims to discuss the distinct features of the US healthcare industry.
Costs in the Healthcare
The United States differs from other countries in a significant increase in healthcare costs, which is not comparable with economic growth or inflation limits. First, the US share of global healthcare spending is 40% (Morabito, 2022). Second, these expenditures quadrupled, from 5% of GDP in 1960 to 20% of GDP in 2020 (Morabito, 2022). Therefore, healthcare spending represents an increasing share of the economy, even though Americans do not consume more services than people in other countries. Large expenses are associated with large expenses for each visit to the doctor or nurse.
High spending is driven by rising drug prices, high salaries for nurses and doctors, and a large price gap for medical services due to a lack of alignment in insurance coverage. The rise in prices, in particular, is due to the lack of competition in the provision of insurance, when 54% of citizens receive them from employers (Morabito, 2022). Lack of attention to disease prevention is another critical problem. The last observation is especially important and trending, as timely prevention can significantly reduce costs. Experts note that healthcare is not a free market, and therefore capitalist principles are poorly implemented here in practice.
The US Expenses Compared to Other Developed Countries
The US has a special healthcare spending situation due to unique political, social, and economic factors. Remarkably, the United States spends several times more on healthcare than other countries with an upper middle income per capita. In particular, in the US person spending was $11,945 in 2020, whereas, in comparable countries, the average is $5,736 (Wager et al., 2022). Therefore, the United States ranks first in the world in terms of spending on health care, which indicates insufficiently effective financial management practices in this area. Americans spend so much because of the fragmented Medicare reimbursement system, high drug prices, and high salaries for healthcare workers. Noteworthy, prices set by pharmaceutical companies are not justified, since many pharmaceutical companies produce analogs of existing drugs without the costs associated with research and development of unique formulations.
Role of the Federal Government in Health Care Delivery and Financing
The role of the state in financing and providing medical services is realized through the Medicare and Medicaid programs. These programs unevenly cover the medical needs of the population and practically do not take into account the need for preventive measures. The federal government usually works in partnership with the states to provide consumer protection, system and supplier regulation, and research regulation. The federal government enforces minimum standards for the provision of health care services as the main source of funding, while funding can be expanded by the states. Just as importantly, the federal government is shaping laws such as the Affordable Care Act (ACA) and the Americans with Disabilities Act (ADA) and issuing additional guidelines for minimum requirements. In general, the participation of the federal government in the provision of medical services is adequate, except for public insurance practices.
Conclusion
Thus, the distinct features of the US healthcare industry were discussed. The US ranks first in the world in health care spending, at least twice as high as in countries with an upper-middle income GDP. The high costs, unfortunately, are due not to a higher quality of services, but to more expensive medicines, high salaries for doctors and nurses, and an unbalanced insurance system that finances different types of services unevenly.
References
Morabito, C. (2022). Why health-care costs are rising in the U.S. more than anywhere else, CNBC. Web.
Wager, E., Ortaliza, J., & Cox, C. (2022). How does health spending in the U.S. compare to other countries? Health System Tracker. Web.
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