Introduction

An analysis published in the medical journal JAMA held that between 1996 and 2013, healthcare spending in the United States increased by about $933.5 billion. This swell mostly resulted from general higher prices for health care services.

The International Federation of Health Plans in 2016 also reported that Americans pay high prices as compared to other developed countries. There is ample evidence out there showing clearly that healthcare in the United States is costly.

Why the surge in Healthcare?

Rising prices of services

Joseph L Dieleman, an assistant professor at the Institute for Health Metrics and Evaluation at the University of Washington noted that the most significant driver of healthcare spending lies in price and the variety and complexity of services.

Dieleman further stated that above half of the total spending increase was as a result of the rise in price and intensity, which contributed $583.5 billion to the $933.5 billion total increase as reported in the medical journal JAMA.

Cost of drugs

Similar to the rising prices of service is the cost of drugs. This is another major factor that contributes to expensive healthcare in the United States, unlike other developed nations of the world. Many other countries negotiate and regulate drug prices, working in tandem with drug makers. But the situation is different in the United States. For instance, Medicare Part D was created by Congress to negotiate drug prices with drug makers, but it was denied the right to use its powers which could aid in reducing the cost of drugs.

The expensive mix of treatment

A 2014 report by the OECD indicates that medical practitioners in the United States most likely use an expensive mix of treatments as compared to other developed nations.

This situation has resulted in more spending on technology in many locations. Also, more people in the United States are being treated by specialists at higher fees than primary-care doctors who ought to have administered the same treatment to them at a primary-care level as evidenced in other countries. Specialists demand higher fees which is a contributory factor to expensive healthcare.

Outpatient treatment

Outpatient care also referred to as ambulatory care also accounts for an overall increase in healthcare. Annual spending on ambulatory care rose from $381.5 billion in 1996 to $706.4 billion in 2013. The report is contained in the analysis published in the medical journal JAMA.

Conclusion

The upsurge in the cost of healthcare in the United States is not without any cause. As noted by Robert F Graboyes, a senior research fellow at the Mercatus Center in George Mason University, a significant part of the high prices paid for drugs is a regulatory problem. And it can be clearly seen that to reduce the high cost of healthcare, the government needs to weigh in and of course, play a stronger role in negotiating prices for healthcare as it is done in other developed countries, and if possible regulate prices of drugs.