The Healthcare Costs in the United States

The healthcare costs in the United States are high due to wasteful spending, making medical care difficult to afford for many Americans. There is no universal healthcare coverage for all US citizens; thus, healthcare costs in the United States exceed that of other developing countries (Crowley et al., 2020). Despite implementing the Affordable Care Act in 2010, about 30 million non-elderly Americans remain uninsured or underinsured (Cai et al., 2020). Lack of insurance prevents people from obtaining timely medical attention, which results in severe health outcomes in a country with high-quality medical services. Having more than 10% of the working population not being able to afford medical care for a country that spends more than 17% of its GDP on healthcare should become the goal for improvement (Cai et al., 2020). High healthcare expenditure and limited medical insurance availability for many citizens indicate the high costs of one of the essential public needs.

Drugs, laboratory tests, diagnostic imaging, surgical procedures, and hospital maintenance in the US have the highest costs compared to other developed countries. For example, the total spending on medications and lab diagnostics increased by more than USD 10 billion in less than twenty years (Schwartz & Woloshin, 2019). Simultaneously, the expenditure for medical services advertisement expanded from USD 1 billion to USD 6 billion, indicating a substantial increase in medical marketing spending (Schwartz & Woloshin, 2019). Healthcare costs have been growing annually, but universal healthcare insurance is still unavailable. All available health insurance models need to be discussed to understand the healthcare insurance problem in the United States.

Different health insurance models are used in many developed and developing countries to provide universal healthcare coverage. For example, Germany and France use the social insurance model where healthcare insurance is compulsory and delivered by an employer (Crowley et al., 2020). Universal healthcare insurance for all citizens in Denmark and the United Kingdom is provided by their governments (Crowley et al., 2020). As previously mentioned, there is no universal healthcare coverage in the United States. Health insurance in the US is instead a mixture of various models. For example, children and adults with insufficient income are covered by the Medicaid government program, while people over 63 years old receive Medicare national health insurance (Rosenthal, 2018). The working population either receives employer-based insurance or remains uninsured (Crowley et al., 2020). One common problem for all insurance models used in the United States is out-of-pocket payments apart from insurance (Rosenthal, 2018). Three articles from peer-reviewed journals and a book from a Harvard physician will be used to evaluate the problem of underinsurance in the US healthcare system. This annotated bibliography will discuss what the costs of US healthcare are, the reasons why the prices are high, why so many Americans are uninsured or underinsured, and how better healthcare coverage can be achieved.

This systematic review explores the possible costs of US healthcare in a single-payer system scenario known as Medicare for all. This study’s target audience was policymakers involved in developing healthcare-related legislation to demonstrate to them the benefits of the single-payer model. The authors examined 22 single-payer plans described in 18 studies published from the early 1990s to 2018. This study determined that the total savings from using the single-payer ranged from 3% to 27%. Specifically, the highest savings came from administrative savings because the payment system was simplified. Furthermore, multivariate regression analysis identified that the second-highest saving in this healthcare plan came from reduced medications and equipment costs. The authors estimated that approximately 40% of healthcare spending in the United States is wasteful. This study’s main limitation is that most of the analyzed studies of this model were conducted not in the US because there is no single-payer model in the American healthcare system. Therefore, using this article will require adjustments to the US healthcare model to suggest a quick and effective transition to universal health insurance.

This paper explores the possible reasons for high spending in current US healthcare and suggests potential ways to switch to universal health coverage with reduced costs. The target audience is the US healthcare policymakers. The first part of this paper describes that millions of US citizens remain uninsured. Furthermore, the authors demonstrate that healthcare spending in the US is not sustainable because most spending was accounted for hospital services and prescription drugs. The reason for such high costs is the lack of centralized control of drug prices. Another reason for high healthcare costs is excessively high administrative costs. In the second part, the authors present possible ways to reduce healthcare costs. Authors suggest that US healthcare insurance should become mandatory for everyone and switch to the single-payer model. These two approaches will ensure universal coverage and reduction of costs. In the third part, the authors analyze the possible ways for healthcare cost reduction. This paper suggests that overpricing and overtreatment should be diminished by centralized control of pricing for medical services. This paper helps explore the problem because it compares the US healthcare system to the existing models in other developed countries.

This book explores multiple reasons why healthcare in the United States became expensive. Elisabeth Rosenthal, a medical practitioner and the author of this book, wants to target every American to understand how the citizens’ health is now used for business. The structure of the book resembles the form of a patient interview which includes the history of the present illness and the review of systems with the subsequent diagnosis and treatment. However, this history of present illness describes the history of American healthcare. The first part of this book discusses what constitutes expensive healthcare in this country. Each chapter of the first part presents stories of patients who were affected by pricing in the healthcare business. Moreover, each chapter explores the history behind the American insurance model and the lack of pricing control for drugs and procedures. The second part of the book presents a suggestion for possible ways to reduce healthcare costs. The limitation of this book is that the author cannot suggest how to implement them in the existing US healthcare system. Nevertheless, this book helps to deeply understand the reasons behind the high costs of the US.

This paper explores the issue of excessive spending on the advertisement of medications and healthcare services. The authors wanted to target healthcare legislators, medical insurance companies, medical associations, and the US Food and Drug Administration. The authors conducted a review of spending on a medical advertisements from 1997 to 2016. The results showed that the most spending was attributed to the promotion of drugs and health services. Moreover, the authors found a rise in expenditures for disease awareness campaigns for the same twenty-year period. According to this review’s results, the target audience for these marketing campaigns were patients and healthcare workers. This paper demonstrated that over-advertisement not only results in waste of finances but may also cause harm to patient health due to self-diagnosis and self-prescription. The limitation of this study is the underestimation of the actual spending on medical marketing because of the unavailability of enough data about the expenditure for marketing campaigns. Nonetheless, this paper helps elucidate one of the main reasons behind the high healthcare costs in the United States which is wasteful expenditure for the excessive advertisement of medical services.


Cai, C., Runte, J., Ostrer, I., Berry, K., Ponce, N., Rodriguez, M., Bertozzi, S., White, J. S., & Kahn, J. G. (2020). Projected costs of single-payer healthcare financing in the United States: A systematic review of economic analyses. PLoS Medicine, 17(1), 1-18. Web.

Crowley, R., Daniel, H., Cooney, T. G., & Engel, L. S. (2020). Envisioning a better U.S. health care system for all: Coverage and cost of care. Annals of Internal Medicine, 172(2), 7–32. Web.

Rosenthal, E. (2018). An American sickness: How healthcare became a big business and how to take it back. Penguin Books.

Schwartz, L. M., & Woloshin, S. (2019). Medical marketing in the United States, 1997-2016. JAMA, 321(1), 80–96. Web.

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