Why U.S. Healthcare Is So Expensive

Introduction
There is great crisis in the American healthcare due to lack of equitable healthcare
system. Various reports and studies have shown that it is no guarantee for all Americans
especially the low-income communities to receiver high quality care for particular health
problems. As a result, numerous deaths have been reported that are attributed to medical errors,
various cancers and vehicle accidents among others. The American patients have expressed
dissatisfaction with care accorded to them as they find it difficult to receive treatments from
healthcare providers as well as reimbursements from the health insurance providers. Similarly,
the nurses and the physicians have also expressed concerns over unsafe working conditions that
negatively impact their ability to deliver quality care. This shows that there is need to carry out
reforms to enhance efficacy in deliverance of proper healthcare.
Increasing patient’s needs
The advancement in medical science, healthcare delivery and technology has impacted
positively on the well-being of American patients thus increasing their life expectancy.
Significant proportions of American population (35 million people or 13% of total population)
consist of elderly above 65 years (Greiner & Knebel, 2003). It is evident that chronic conditions
increases as the population ages. Recent reports have indicated that there are few medical
programs geared towards chronic diseases such as diabetes and heart diseases thus the
chronically ill patients find it difficult to obtain care from the primary care physician due to huge
associated cost of treatment. Poor communication is another challenges since there is no proper
transfer of information from the hospitals to nursing home thus lowering treatment outcomes.
Additionally, there is an increasing mortality associated with behavioral pattern that patients and
physicians can easily modified. As a result, there is need for health professionals to emphasize

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the need of prevention and health promotion to lower hospitalization and the medical cost. The
American population is further characterized by people of diverse background in terms of race,
religion, sexual orientation and ethnic groups among other personal characteristics. The
individuals belonging to minority racial or ethnic groups tend to receive low quality care due to
difference in income or insurance status compared to Caucasians.
Challenges in providing health care coverage
The passage of Patient Protection and Affordable Care Act of 2010 (ACA) brought
significant reforms in health insurance companies and healthcare providers in the US (PPAC,
2010). As a result, the number of American citizens without insurance coverage fell to about 9
million people (10%). The main feature of ACA is that the providers are paid based on the
patient’s outcomes rather than the number of treatments provided. The value-based payment
system was adopted to curb ever increasing cost of healthcare and spending by the government.
However, there is still millions of Americans that are underinsured or uninsured. Furthermore,
the Americans have been granted opportunity to choose their preferred health plans from a
variety of health insurance options. The elderly may go for government’s insurance plan known
as Medicare or chose plans from private insurers that have been approved. However,
recent studies have indicated that individuals, especially the elderly lack information
and insurance literacy to enable them pick plan that suits their needs and preference
thus many of them may pay more for the insurance coverage (Berkman et al., 2011).
Though majority of the elderly above 65 years old are covered by Medicare, such persons
still need to incur some expenses that are not gathered by Medicare through obtaining private
insurance. However, the health insurance has become unaffordable due to higher medical cost

HEALTH CARE COVERAGE 4
resulting in higher premiums. The increase in cost and prices of medical care is partly due to
inflation and partly due to the increasing intensity of services provided to the patients (Keehan et
al., 2015). The small firms are worst hit as they find it difficult to purchase insurance for its
employees due to rising health care costs and insurance premiums. The employees with
preexisting conditions are also negatively affected since many insurers prefer not to sell policies
to such persons. Since employer is required to share cost with the employee in some instances,
the employers are forcing its employees to incur higher cost when sharing premiums and medical
care. The high cost is affecting profitability of firms thus companies are shifting more cost of
insurance coverage to employees. Therefore, the rising cost is known to shrink workers’ earnings
as well as the corporate profits.
The Obamacare further had huge complexities making it difficult to build health-
insurance marketplace. This is because the individuals seeking coverage are required to provide
huge information such as place of residence and total earnings among others as they shop online
regardless of whether one is purchasing private insurance or Medicaid coverage.
Challenges in providing reimbursement to those who provide care
Despite health care services being integral part of overall well-being of citizens, the
doctors are threatening not to provide best care to the patients due to lack of proper
reimbursement. The reduced medical reimbursement on the service rendered is putting more
pressure on physicians and the whole industry (Danzon, 2014). Many doctors have opted-out of
Medicare and Medicaid while others have left medicine due to increased cost associated with
such coverage that has lowered profitability of their organizations. Furthermore, not all medical
services are covered by insurance companies. The consumers are price sensitive thus they tend to

HEALTH CARE COVERAGE 5
inquire from the physician whether a particular service is insured, if not they will decline that
service.
A number of doctors are reluctant to see Medicaid patients due to low reimbursement
rates. Though the rater varies according to states, Medicaid pays approximately 60% of what
Medicare pays thus discouraging physicians from attending to patients with such coverage.
Another reasons for such reluctance is long waiting times and complex paper work required to be
filled out. Furthermore, these reimbursement is causing more friction between the insurance
companies and the healthcare providers. The hospitals are demanding higher reimbursements to
meet high cost associated with Medicaid and healthcare cost.
Conclusions

Health is one of the major priorities for American government as seen by various
strategies adopted across different states to tackle healthcare crisis. The rising cost of healthcare
has caused huge financial constraint to American citizens while others have been forced to bear
burden due to lack of insurance coverage. As a result, the government has initiated Medicare and
Medicaid to enable its citizen get insurance coverage. However, there has been huge challenges
facing insurance coverage including high cost of medical services, poor insurance literacy and
high cost of private insurance. Furthermore, low reimbursement rates and long waiting rate has
caused huge friction between insurers and medical care providers thus hampering healthcare
provision.

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References

Berkman, N. D., Sheridan, S. L., Donahue, K. E., Halpern, D. J., & Crotty, K. (2011). Low
health literacy and health outcomes: an updated systematic review. Annals of internal
medicine, 155(2), 97-107.
Danzon, P. M. (2014). Pricing and reimbursement of biopharmaceuticals and medical devices in
the USA. Encyclopedia of health economics. Elsevier, 127-s35.
Greiner, A. C., & Knebel, E. (2003). Challenges Facing the Health System and Implications for
Educational Reform.
Keehan, S. P., Cuckler, G. A., Sisko, A. M., Madison, A. J., Smith, S. D., Stone, D. A., … &
Lizonitz, J. M. (2015). National health expenditure projections, 2014–24: spending
growth faster than recent trends. Health Affairs, 34(8), 1407-1417.
Protection, P., & Act, A. C. (PPAC; 2010). Patient protection and affordable care act. Public
law, 111(48), 759-762.

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