Expensive health care costs are well known by any American who has had a doctor’s appointment or visited a hospital for services. But why are the services rendered at a doctor’s office or hospital so expensive? How much markup do doctors and hospitals place on health care products and pharmaceutical drugs? And why do Americans pay so much more for health care than other countries? (Source 1, Source 2 & Source 3).
The numbers are astounding. As a country, the United States spends more on health care than the next 10 biggest spenders combined. Those countries include: Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain and Australia. Americans spend nearly $60 billion on health care every week and are expected to spend nearly $2.8 trillion on health care in 2013. Of that $2.8 trillion, Medicare will pay roughly $800 billion and private health care insurance companies will pay the remaining $2 trillion. These numbers show the strain on businesses that pay for their employees’ health insurance. (Source 1, Source 2 & Source 3).
While these numbers seem unsustainable and place a burden on the overall United States economy, there does not seem to be relief in sight. The health care industry has the power to keep prices so high. Since 1998, companies related to the health care industry have spent nearly $5.36 billion lobbying in Washington. By comparison, the defense and aerospace industries have spent $1.3 billion and the oil and gas industries have spent $1.3 billion lobbying. (Source 1, Source 2, & Source 3).
Finally, another contributing factor to high health care costs is the salaries paid to individuals who work in the health care industry. At university related medical facilities, presidents of the hospital systems are often paid nearly two to three times the salaries of the presidents of the entire university system. Not to be left out, midlevel managers at hospitals are likewise compensated generously for their services. In New York City, 14 administrators at a hospital cancer center are paid over $500,000 a year, which includes 6 who receive over $1 million a year. (Source 1, Source 2, & Source 3).
With numbers like these and a seamless endless supply of money to lobby Washington with, the expensive American health care system does not appear to be getting any cheaper in the near future.