The real reason American health care is so expensive
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The real reason American health care is so expensive


I cannot tell you how obsessed I am with this chart. It shows exactly what is wrong with America’s conversation about health care. On one level, you’ve seen this chart before. It shows health care spending as a share of the economy of a bunch of countries. There’s Germany and France and Japan and Canada and oh! There’s America. But now I want to add something you haven’t seen to this chart. This is how much of that spending in each country is private and how much is public. Here’s what’s amazing: America’s government spending on health care on programs like Medicaid and Medicare and the VA – our versions of socialized medicine. It’s about the same size as these other countries. These countries where the government runs the whole health care system! And then there’s our private spending. It’s the private insurance system that makes health care in America so expensive. Conventional wisdom says that the government is more expensive than the private sector. “It can’t say no. It’s corrupt, it’s inefficient, it’s slow.” “If you want something done right you give it to the private sector.” That is what we hear in America all the time. And yet here we are with the biggest
private sector spending the most. If you look at the data on physician visits and hospital discharges, you can get rid of one theory. Americans don’t consume more health care than people in these other countries. We don’t go to the doctor more than the Germans or the Japanese. In fact we go to the doctor less. The difference between us and them is that we pay more. Every time we go to the doctor for everything from an angioplasty to a hip replacement from a c-section to a pain reliever. In America, the price for the same procedure at the same hospital, it varies enormously depending on who is footing the bill. The price for someone with public insurance like Medicare or Medicaid is often the lowest price. These groups he covers so many people that the government can demand lower
prices from hospitals and doctors and they get those lower prices. If the doctors and hospitals say ‘No’ they lose a ton of business. They lose all those people on Medicare all those people on Medicaid. But there are hundreds of private insurance companies And they each cover far fewer people than a Medicare or a Medicaid. And each one has to negotiate prices and hospitals and doctors are on their own. And if you’re uninsured, you have even less leverage. Nobody is negotiating on your behalf. So you end up paying the highest price. One study found that most hospitals charge uninsured patients four times as much as Medicare patients for an ER visit. Other countries, they don’t have this problem. Instead of every private insurance company negotiating with every healthcare provider. There’s just this big list. The country, the central government, they go and they say, “If you want to sell to us, to all of our people, then here’s what you can charge for a checkup. Here is what you can charge for an MRI or a prescription for Lipitor. And so then whether that bill goes to the heavily regulated private insurance companies in Germany or directly to the government like in the UK. Each country is telling the doctor or hospital or drug company how much that bill will be. And because the government controls access to all of the customers. It’s an offer that hospitals and doctors and pharmaceutical companies typically can’t refuse. “I’m going to make him an offer he can’t refuse.” In America the idea is that you’ll be a consumer. That you’ll do what you do when you go to
Best Buy and buy a television. But that just doesn’t work in healthcare. It doesn’t work in healthcare because you often come and get health care when you’re unconscious, in an ambulance, when you’re scared, when it’s for your spouse or your child It is a time when you have the least bargaining power. You are not usually capable of saying, ‘No.’ You’re not knowledgeable enough to do it, you’re not comfortable doing it, or you’re not conscious enough to do it. That’s why in other countries the government is a person who can say ‘No’ for you. You can say, ‘No, that’s too expensive you’re going to have to lower your price’ because they do have that power. Anchor: A new push for single-payer health care right here in the US. Demonstrator: What do we want? Crowd: Single-payer! Demonstrator: When do we want it? Crowd: Now! Anchor: California and others are saying maybe we should adopt the European model. Klein: If we decided to create a single-payer system with one of these huge price lists in the US There would be nothing to stop lobbying from hospitals from doctors from drug companies. And those prices would get influenced. So we could end up with a single-payer system that is expensive. Even as expensive as our current system. It all depends on how much you negotiate down the prices and now in America these groups have so much power
because they are so rich. That it’s really hard to get them to bring down the prices. This is the irony of American healthcare: It’s so expensive that it’s become
hard to make it cheaper. All that money they make, that becomes political power. And years and years and years of overpaying – those are huge industries now. And they have a lot of influence in Congress. Under a single-payer system if we did drive prices down, doctors and hospitals they would be paid less than they are right now. That might mean some of them close or some go out of business or some move. It would be really painful. One person’s waste is another person’s essential service or local hospital or their income. But then single-payer it’s not an all-or-nothing choice. For instance, there’s a really interesting section of Bernie Sanders Medicare-for-all bill. Where he lays out this interim plan. It’s a plan he wants while he’s setting up his new single-payer system. And in that plan, he expands Medicare to cover vision and dental. And he opens it to nearly everyone. Not just people 65 and older. All kids go on Medicare automatically and most adults can buy in. That plan, on its own, it wouldn’t get American health care spending far down overnight. But it would at least begin to recognize what we already know and what most other countries already do: That health care is one of those things the government can do cheaper and better than the private sector.

100 Comments

  • Andrew Theodore

    It’s not the the private market is inefficient. It’s the regulatory capture and patent system that doctors lobby for are inefficient.

  • James Shaw

    An example of a parallel, is actually law enforcement. There was a makeshift system in the old west, were a man was given a gold star, then "ruled" a town, then the Texas rangers came in, and brought a level of law and order. The government does law enforcement better, then the private sector does.

  • Steven Barendregt

    Your premise is faulty. The usa does not have a "free market" in healthcare. We actually have a highly regulated healthcare market. If we actually had a free market, then healthcare would be affordable.

  • Paul Mielcarz

    Amazing insights! You say that socialist healthcare is cheaper and more effective. You say that capitalism and competition drive prices UP. IT'S EXACTLY THE OPPOSITE. DO YOUR HOMEWORK YOU… LIBERAL. -_-

  • Eonkuja

    In the netherlands you have insurance and you also pay health taxes. Basically, you pay healthcare for others via taxes but when you need healthcare its free for you too

  • jetblackhair92

    Most people rarely need to be admitted to hospitals. Don't know why US won't provide free healthcare to citizens

  • gabriella lopez

    Oh dude, clearly you're misinformed or have never worked at a hospital or doctor's office. People with insurance get charged more, why because the insurance will pay, it is not the fault of the insurance, they have to adjust their proces accordingly. Do your homework before posting

  • Seung Hyun Kim

    The breakdown of America's healthcare expenditure is actually taken more by private insurance. Doctors are not paid much in comparison…its the institution that is paid, not individuals.

  • Aaron S

    You know, if you banned lobbying in politics that would fix the problem that you mentioned about single payer. I understand that's a long shot, but it's also true that candidates running for single payer are against lobbying or don't take lobby money, so it would be less likely for the drug companies to add on the dollars you spoke of.

  • legit 77

    The US healthcare industry needs a good dose of competition. The problem is that true competition is government regulated. The repeal of all Certificate Of Need Laws will help drive prices down. Government needs to get out of the way and let the free market flourish in healthcare just as with any other business. No reason not to be able to get a $100 MRI. Will it put some out of business? Yep. Too bad – so sad. But the free market will let it work itself out.

  • Zbynek Kolacek

    As one guy that works in health care business said… , they will never change it because of, there is running tooooo much money through.

  • Abdul Rehman

    I am just really surprised that around 8500 people has disliked this video. These people might the real rich or the brain washed people who are constantly watching the right-wing media. Topics like this should be considered and discussed on the neutral level.

  • Alex Vasiliou

    Nope, you are only comparing prices. By your logic a Ferrari is the worst car because it's the most expensive one. Videos like this is exactly why Vox has lost it's credibility. The US healthcare is the best in the world (hear me out…). It's services are of higher quality, wait times are significantly lower because there are more doctors available. Why there are more doctors available you might ask? Because it has better working conditions. More doctors lead to more new drugs and treatments developed. And guess what? Most drugs and treatments are developed in the US. Btw that is benefiting the rest of the world including countries with "free healthcare". Policies like "free healthcare" are leaving people with no healthcare at all and doctors with no jobs. Between 2008 and 2012, 8000 doctors left the UK to find work in other countries, mostly the US. Oh and did they just promote Bernie's view of healthcare 😂. Basically what I'm saying is that in the US you have to pay more but you are also getting more for your money and Americans paying more is the reason many drugs and treatments exist and are so widely available across the world.

    BTW I'm Greek

  • Check Norres

    People are spending more because they make the incorrect decision to not pay their health insurance?
    If that is true, not a problem of the state, but you are fricking wrong – people are not getting good health ensurance because it is difficult to find a good reputable and affordable deal, because even though healthcare industry, you know the part that actually works and is good in the US, the insurance industry is regulated and was made even worse by obamacare

  • drgmani apollohospitals

    Doctors and healthcare system in America are making fools of American public at large…its high time Americans rise up to this..its a shame really

  • THEY

    This is actually a systematic problem in the 🇺🇸. Not just in healthcare. Our government and corporations have way too much overhead expenses. Why? Greed on the upper end, and lack of responsibility on the lower end. Also, the drug industry has corrupted our medical system. Most prescription drugs more harm than good.

  • Yukihira Rin

    In my country it's free, just cutting around 5% of salary and whole family get a health care card.
    The system will be:
    You need to be listed to the smallest official clinic. If you're sick, you'll be go there first, if they can't handle you, you'll get recommendation to the bigger clinic/hospital.
    There's level for card. Don't worry if you're listed to the lowest level, you can get VIP room if the economic room is full. The medical treatment is same tho.
    .
    .
    There's a debate whether sickness that only need to pay around 5$-10$ for medicine actually need to be covered or not.
    .
    .
    At first the government have a lot of debt to hospital when it's earlier implemented and people just pay it if they need it because they don't want to pay someone else's medication, but I think it's better now.

  • Jamil Angon

    Why private insurance so expensive? You are subjected to Co-Pay, Coinsurance and Deductible. Imagine you need to speend $1-3k before insurance pays for you. And if you are lazy enough that you did not pay attention on insurance asking for additional information once you are discharge, well you are ending paying 3k atmost for observation room and 2 IVs

  • Bonnie Hundley

    Just call a veterinarian for your health care needs.
    Medical physicians only learn one species. Veterinarians learn to treat multiple species.
    The prices are lower because they're dependent on price sensitivity of the marketplace.
    Veterinarians are more reasonable about your quality of life outcomes.
    There are veterinary specialists. Need an MRI? Done. Joint replacement? Done. Oncologist? Yep, available. Physical therapy? Done. It's all there. Vet care costs can add up, but the prices in the USA are not as artificially inflated as you find in human medicine, and the outcomes for pets seem pretty good given that they're living far beyond average life spans.

    I've had to do all sorts of diagnostic/surgical work on horses and dogs. So I've been there, done that which is why I think I'd rather just go to a veterinarian for my healthcare too. It's less fuss and less paperwork.

    If that's not an option, fly yourself anywhere around the world for healthcare you need. Medical Tourism is a big thing now. If business can outsource abroad to find a good price, so can you.

  • Bob Quigley

    Private anything in US has has no desire to contain cost. NOW zombie like Infinite growth in a finite world is baked into our flailing democracy

  • Eric Bland

    3:28 and if the US had that power our government is SO corrupt and greedy it would be even worse if they controlled the prices… yes the government COULD do it cheaper and better then the private sector. But they won't cause people actually care about that part of politics and our government would have big problems with millions of angry Americans after they take over and charge 12 grand to get a cavity filled.

  • Derick Entertainment

    If we lose the private sector of healthcare… a bunch of hospitals and clinics will close their doors… good luck with that.

  • D M

    0:50 conventional wisdom? really? it isn't conventional wisdom it is right wing ideology always meant to protect the status quo, the elites, hence they are called conservatives_. It is a myth propagated by a group of _pseudo-scientists called rationalist economist they make up an idealist model called the free market with idealist model of fictitious people, that makes perfect use of reason and they have perfect information. An Idealist model where they run mental experiments (brain farts really), where they can't find any contradiction among their assumptions, so they make the wrong conclusion that "it works, it just works"

    In real science when scientist make a model, they have to compare that model with reality, and see if the results produced by the model are the results of reality, but when rationalists economists have never done anything of this, they assume the model is correct and that they have to change reality to fit their model, which is the complete backwards way around, the model has to be changed to fit reality.

    The thing is, just because a model in simulations or mental experiments works doesn't mean it will work in reality, it only means those mental experiments and specific simulations didn't showed internal contradictions, but it doesn't even guarantee there isn't any internal contradictions, and in no way shape or form begins to cover the external contradictions between reality and the model that is been tried.

    The only reason they keep saying "government is more expensive" is because they assume the only way to reduce prize is competition in the market among businesses driven by the profit motif, the problem is that is all nonsense. Because the government can reduce prizes by economies of scale and also the government can invite people to participate in competition of ideas and even making money by developing better solutions but keeping everything under government control.

  • Chris Parker

    The US healthcare system has three levels. 1) Patients who are wealthy enough to pay for their own treatment. 2) Patients who are wealthy enough to carry a reasonable level of insurance. 3) Poor patients. These are plied with painkillers until their ailment kills them off.

  • 《slothking 》

    ATTENTION!!! So u wanna get rid of the FREE market i never thought people would fight to be oppressed y'all know that chart takes in the overall spending right like the spending to develop new drugs and working on cancer and all of the science of healthcare not just this is what u pay at the hospital go read it CDC website

  • arcangelkrlos

    The Health industry in US is a biz without "real" competition, ergo No Free Market, no Capitalism. Is just a milking cow machine and you are the cows. Everyone get sick at some point and need to pay, the higher, the better.

    And the most disgusting practice: using Public money for R&D and then making the profits going Private. Your taxes used for Private companies benefit.

    For a country that hate so much anything related to social things, they surely like to use Social Capital for private gains.

  • THE ONE BIG RED

    Just let each state handle it
    Stop trying to run things from the top down. Stop comparing the United States to European nations.

  • Rio Li

    And now they (Americans) are stealing (not literally, like buying alot) Canadian medicine because we're cheaper. We Canadian citizens are living with shortages of medical drugs.

  • Howard C

    After so many years of hardworking, the lawyers and doctors in the US finally opened the Pandora’s box. And now they are getting what they wish for.

  • Antonia Palma

    I’ ve never been so proud of being Argentinian, we might be in a horrifying economic crisis but we still have public healthcare. Even though it doesn’t work perfectly, if you’re sick or you have an accident someone is going to take care of you in the ER for free.

  • Lala Lulu

    I had no idea. I feel like the American people think the only solution is fully givernment funded healthcare-clearly that's not the only way to handle this. The government should just regulate health care costs so that insurance companies can't negotiate anything. It should be a fixed rate-no hospital needs a profit margin that high, and if they do, that's when the gov should step in and help. Honestly if insurance was fair, less people would need to be on medicaid and the government would keep more money overall.

  • Waikiki HoundDawg

    If only we could produce the supply of doctors to meet the demand once a one insurance for all is passed. I can speculate possible a decade until that supply is met if the mandate isn't reversed due to all the potential doctors giving up covering down on all the patients.

  • Solomon Tsai

    I had pneumonia and i stayed in a hong kong public hospital for a week. Only costs me about 300 hkd, which is the equivalent of about 40 usd.

  • TheBadassTonberry

    The US system is built on greed and poilitical movement is only measured on how much it benefits THEMSELVES financially, as in theay don't want to pay money through tax instead of credit card (which would make the total amount of costs much less because they don't wan't to pay anything at all..
    Hence, if they can't have it their way, they cry socialist.

  • Presley Rice

    Have you seen the way the VA operates? It’s a joke. I plan on going into the Medical Field. If we start utilizing singe-payer healthcare, I’m dipping. There is no point in studying for that long and passing many test to get paid way less.

  • Mike Davidson

    Mass shootings, Obesity, STDS, fast food addiction, low i.qs, massive divorce rate, overreachimgmilitary and police United States should turn it diwn a bit and fix its own problems

  • Mistersontix

    This video is so left-wing, that all the time U.S. appeared on the screen…it was on the left.

    Freud would be glad!

  • Adithi H

    Does anyone know the source of the survey he mentions at 2:19? I'm doing a research project on this topic and was hoping to use a data set to reference?

  • Christopher Anthony

    It’s not american tho,it’s UNITED STATES,american includes
    Canadians
    And latinos🤷🏻‍♂️🤷🏻‍♂️🤷🏻‍♂️
    America it’s a continent not a country👍🏼

  • Jason Clapp

    Good video, thank you. I have a couple of honest questions to ask. Before I get to them, I agree that the power of lobbying groups is absolutely detrimental to individual people and their freedom in the US. Elections in the US is an opiate to the masses to convince Americans that they matter. Until either lobbying rules change, and/or the number of "representatives" is increased such that the number of people they represent is small enough to actually make a difference, the status quo is where it's at. That said, remember that lobbying only works if there is the flip side to the relationship. Politicians and bureaucrats have to be party to the lobby game for it to work.

    On to my questions (with some commentary). First, I grew up in Canada, and used the health care system in three provinces: Ontario, Manitoba and Alberta. When statistics are used such as were in this video, I never see the qualitative comparisons between countries. At least between Canada and the US, the delivery of health care is not apples to apples. Hip replacement was an example used in the video. When I worked at a college in Manitoba, there were three employees who needed hip replacement surgery. Each had been trying different options before surgery, in order to avoid surgery. Once the doctor finally concluded that surgery was the only way, it was at least 6 months on the waiting list to get in. Health care delivery costs less when the single-payer system dictates a price that is too low, it's not worth it for people to get in on the delivery side, and you have massive backlogs.

    Second question: Do you think that part of the higher cost for services and drugs is because that most of the R&D is done by US companies in the US? Put a different way, do you think that higher costs in the US subsidize health care in the rest of the world? Growing up in Canada, there is not much evidence of a strong entrepreneurial spirit. There aren't many industry-changing innovations that come from Canada. From a health care standpoint, most of what is offered in Canada came via the US. I don't know if or how much this is true for other countries that are compared with the US. My assumption is that maybe Japan and Germany on the hardware side. If that equation changes, costs might fall in the US, but will that cause costs to rise in other countries? If so, do we care?

    One of the most eye-opening parts of the video was the comment that at the time of needing the expensive services, patients are not in a position to negotiate costs. That said, if I go to the ER, with a gaping wound or some internal pain, there is no way for someone to give you an idea of how much it costs until they run some tests. For me the biggest disappointment of the ACA law was that it didn't divorce health insurance from employment.

  • Splaticus Blah

    Universal greed is the total problem. The tragic American paranoia over social programs kills them. Americans are far too selfish to think of a social program. They can't understand the concept of I am healthy but will pay a small amount because they have been taught to be selfish. If you pay a tiny amount now all those small payments add up and if you become in need then you can be helped. American society is built on greed and that is their flaw.

  • Splaticus Blah

    There will be a tipping point when all those guns are turned inwards..the second amendment was made for that..the right to fight against domestic government .

  • Carter Gadola

    "It is so expensive, it is hard to make it cheaper." Great point about majority of people using healthcare when they are uncomfortable.

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