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Our Health Care System Needs Structural Reform
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Cloe Hughes

Feb 08, 2024

The U.S. has one of the highest health care costs in the world. How does that affect us, and how can we fix it?

The United States has one of the highest healthcare costs in the world, spending $4.5 trillion on healthcare in 2022. Since the 70s, U.S. health spending has risen to roughly 17.7% of the GDP. However, despite this spending, American healthcare ranks below the other top 10 wealthiest nations in terms of accessibility, equity and quality of care. This disparity is concerning and signals a dire need for structural reform. Americans deserve affordable and higher-quality care. 

While these costs definitely contribute to the national debt, a lot of the burden is also placed on American citizens. Over the past 20 years, the price of healthcare services has increased substantially–growing at a rate of 3.1% per year while prices for other household goods and services grow at an average rate of 2.6% per year. This is difficult for Americans, many of whom have shared that they find it difficult to afford healthcare. 

This is especially concerning as many individuals are forced to postpone healthcare services or forgo medication due to financial concerns. A quarter of American adults have admitted that they have postponed or forgotten necessary healthcare because of costs, and one in five adults have skipped prescriptions.  

The issue at hand is overspending. To solve this issue, we have to look at costs. The largest three components of U.S. healthcare expenses are insurance administration costs, provider spending on administration services and higher costs for prescription drugs. This means the largest contributor to U.S. healthcare prices is the overcomplication of health administration. In fact, the United States spends over three times as much on administrative costs as the next highest country on a list compiled by the OECD (Organisation for Economic Co-operation and Development), coming in at $1,055 per person on administrative costs compared to Germany’s $306 per person.

In order to reduce these costs, we need to increase efficiency by standardizing administrative systems. For example, every insurance company currently has a different organization and payment system. The process for sending medical records between hospitals is also particularly convoluted. Alleviating unnecessary complications such as these would save both time and expenses. While internal improvements within each hospital and individual organization can help standardize and streamline administrative services, federal legislation is also needed to ensure coherency between these organizations. 

To reduce pharmaceutical costs, the federal government also needs to place price caps on various medications. Not only would it lower overall healthcare expenses, but it would also help Americans struggling to pay for life-saving medicine. For example, in the 2010s, when insulin prices spiked, many individuals with diabetes couldn’t afford their medication, leading to preventable deaths. No one should be forced to decide between paying rent and buying life-saving medications. 

While healthcare reform is a difficult undertaking, it’s ultimately necessary for the health and wellbeing of the American citizens, the economic health of the country and the moral responsibility of our legislators. 

The opinions in this article are those of the individual author.


Resources:

“High U.S. Health Care Spending: Where Is It All Going?” High U.S. Health Care Spending | Commonwealth Fund, 4 Oct. 2023, www.commonwealthfund.org/publications/issue-briefs/2023/oct/high-us-health-care-spending-where-is-it-all-going.

Lunna Lopes, Marley Presiado. “Americans’ Challenges with Health Care Costs.” KFF, 21 Dec. 2023, www.kff.org/health-costs/issue-brief/americans-challenges-with-health-care-costs/.

“David Cutler on Trimming U.S. Healthcare Costs.” Harvard Magazine, 17 Apr. 2020, www.harvardmagazine.com/2020/04/feature-forum-costliest-health-care.

“Ranking the Best Healthcare in the World by Country.” International Citizens Insurance, 22 Jan. 2024, www.internationalinsurance.com/health/systems/.

“The Role Of Administrative Waste In Excess US Health Spending.” Health Affairs, www.healthaffairs.org/do/10.1377/hpb20220909.830296/#:~:text=At%20Least%20Half%20Of%20Administrative%20Spending%20Is%20Wasteful,-As%20noted%2C%20not&text=Put%20another%20way%2C%20if%20administrative,%E2%80%93%24570%20billion%20in%202019).

“Why Are Americans Paying More for Healthcare?” Peter G. Peterson Foundation, www.pgpf.org/blog/2024/01/why-are-americans-paying-more-for-healthcare#:~:text=While%20the%20COVID%2D19%20pandemic,to%2017%20percent%20in%202022. Accessed 7 Feb. 2024.

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